McHale & Co. Solicitors Blog

Interest Rate Swaps - The Latest - June 2013

It was good to catch-up this morning in our offices with Abhishek Sachdev from Vedanta Hedging who had been widely quoted this week in the Final Banking Commission Report. We compared notes on the state of the Redress Scheme and found that our experiences of attending information gathering meetings with banks was rather similar. We also agreed that it is key to obtain all documentation held by the banks in advance of such meetings and also to provide written submissions to hand over at or shortly after the meeting.

All of us operating in this space know that the banks are delaying as much as they can. That being said the banks are becoming bolder in their interpretation of the rules that were set by the FSA. RBS yesterday told one of our solicitors that they inter-operate the rules as them having 12 months from the date that they start the redress process for an individual client. Given that they have not started the process for the vast majority, it appears that very few people will see offers this side of Christmas.

And so the thorny question of whether or not to litigate immediately or wait for the review now comes into play again.

We have shown restraint on behalf of certain clients who believed that the banks surely couldn't prevaricate and delay any further. They also believed that the FSA/FCA wouldn’t let them. Unfortunately, given the absence of any regulatory sanction to date, I am struggling to see what use the FCA will be in getting the banks to do what they have already agreed to do.

The sad truth is that the banks do not fear the regulator and will take as much time as they wish over this. In this sense the  timetable of the High Court becomes more and more attractive. A process where the banks do not dictate the pace seems to be the best way forward.

At a lunch with a representative of the Bank of England yesterday (Chatham House Rules apply) one of my fellow diners opined the amount of “banker bashing” that is still going on. I suggested that most people don’t want to expend their energy bashing anyone; they just want the banks to do what they said they were going to do. The bankers want us to judge them by their words and not their deeds: “Shameless” is a word that springs to mind.

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