3 banking issues to watch

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Since the start of the financial crisis, banks have been front page news. But sometimes the issues involved get glossed over in the rush to print the particular headline. Here is a summary of three of the big issues facing banks at the moment.

1. Libor rate fixing
This concerns the London inter bank lending rate and follows Barclays being fined £290m in June for some of its traders have tried to rig the rate. At the time it forced Barclays Chief Executive and Chairman to resign. But what will be interesting going forward is whether all of this and any further evidence which comes to light leads to any legal actions for compensation from any groups which may have been affected. 

2. Interest rate swap mis-selling
This issue is about the possibility that banks were selling products involving interest rate swaps without fully explaining the risks which were involved. When losses have resulted, people start to question again whether compensation might be a possibility. It’s another hot issue to watch although round one at least went to the banks when RBS won a claim against them in Scotland last month.

3. Leverage ratios
This isn’t about legal cases yet but is likely to be the focus of enormous debate in the coming months and it concerns what percentage of their overall lending the banks must retain in capital. Europe has indicated 3% in their Basel III agreement as does the government White Paper whereas the Independent Commission on Banking led by Sir John Vickers recommended just over 4%.

Of course, this is all just scratching the surface and if you really need advice on banking issues then you might consider instructing a banking law solicitor.

Osborne Clarke solicitors are leading specialists in banking law.

September 30, 2012 · Tim Kevan · Comments Closed
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