Martin Wheatley said that “nobody wants this to drag on for years and years”, so has given the banks until April 2014 to complete the task, although he noted that it is “quite a challenge” to get to that.
At the moment, only £500,000 has been paid out in 10 cases, even though the banks have taken on an extra 2,800 staff to deal with more than 30,000 of them and despite it being more than a year since the regulator set up the redress scheme for victims of the scandal.
To date, the banks have set aside £2.5bn to cover the claims for compensation that have been lodged, although provisions made by different banks vary wildly. State-backed RBS has the most claims at 10,528, while Barclays faces 3,436. RBS has only set aside half as much but Mr Wheatley said that the state-owned bank might explain the reasoning behind the difference by the unequal complexity of the products that RBS and Barclays had sold.
However, the FCA’s figures show that RBS is also behind the other banks in the redress process, with some 4,602 cases still at the “sophistication assessment” stage, compared to none at Barclays and fewer than 900 at Lloyds.
Critics are concerned that the banks could try to delay paying compensation but the regulator has pointed out that, since all compensation payments are subject to eight per cent interest, which will accrue until paid out, that would not be in their interests. In addition, Mr Wheatley said, all the CEOs of the banks have agreed by their actions that they will not force businesses into bankruptcy.
For more information, please contact Glazers, Chartered Accountants in London or visit www.glazers.co.uk
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