Recent events suggest that the financial system in general, and the banking system in particular, still have serious issues to resolve before we, the general public, can be confident that all the outstanding misselling issues have been resolved; that the biggest banks have dealt adequately with their misselling liabilities and that they are properly capitalised and ethically run, complying with their duty to their customers and to the regulator to treat their customers fairly.
Let us start with the alleged missale of interest rate hedges and the more exotic variants, such as interest rate caps and collars. These products are intended to protect the customer against interest rate risk. In principle, therefore, they can meet customers’ needs as they provide greater certainty over future loan repayments. However, these products can also be very complex and, therefore, susceptible to misselling.
The full article can be read over on Money Marketing.
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