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At Honestly Banking we wanted to have a look inside the workings of Swaps, Hedging, Caps and Collars and throw some light into this obscure and complicated world. There has been a remarkable amount of media interest around the Swap mis-selling scandal. Inevitably it is hard to capture the real complexities of this involved area without over simplifying matters or getting highly technical.
A brief background: Banks have been selling Interest Rate Derivatives under the guise of ‘risk management’ for many years, firstly to big corporates, then to smaller companies and then when the greed got the better of them to anyone they could. You may think this sounds a lot like the sub-prime mortgages. Back then banks sold mortgages to unsuitable clients. Now they are selling swaps to unsuitable clients. Different product, same motivation – a quick profit.
With lower Interest Rates many people are discovering that they have been sold something that actually increases their risk. Additionally the banks have not been sticking to the rules and have been profiteering at the expense of small businesses and individuals. This is a completely different order of magnitude to PPI mis-selling. Homes, businesses, farms and livelihoods are being lost. Families are being ripped apart. Barclays have tried to gag their clients from even talking to the regulator, the FSA, about it.
Banks have developed this area into a highly profitable multi-million pound industry. It’s so profitable they have set up many regional sales centres to peddle their wares. They are staffed typically by smooth talking ‘risk advisors’ who bamboozle the unsuspecting client into something that will possibly be the worst decision of their lives.
More:
http://www.blog.rippedoffbritons.com...s-sold-to.html
A brief background: Banks have been selling Interest Rate Derivatives under the guise of ‘risk management’ for many years, firstly to big corporates, then to smaller companies and then when the greed got the better of them to anyone they could. You may think this sounds a lot like the sub-prime mortgages. Back then banks sold mortgages to unsuitable clients. Now they are selling swaps to unsuitable clients. Different product, same motivation – a quick profit.
With lower Interest Rates many people are discovering that they have been sold something that actually increases their risk. Additionally the banks have not been sticking to the rules and have been profiteering at the expense of small businesses and individuals. This is a completely different order of magnitude to PPI mis-selling. Homes, businesses, farms and livelihoods are being lost. Families are being ripped apart. Barclays have tried to gag their clients from even talking to the regulator, the FSA, about it.
Banks have developed this area into a highly profitable multi-million pound industry. It’s so profitable they have set up many regional sales centres to peddle their wares. They are staffed typically by smooth talking ‘risk advisors’ who bamboozle the unsuspecting client into something that will possibly be the worst decision of their lives.
More:
http://www.blog.rippedoffbritons.com...s-sold-to.html
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