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Banking reforms could harm SMEs

We at Vedanta Hedging were asked to provide both formal oral and written evidence about the usefulness of derivatives for SMEs. This is particularly in respect of managing the risk of movements in interest rates, as well as in the currency markets. Many importers and exporters cannot afford for example currency swings of 10-20%.

An article in the FT warns that the Banking Reform Bill may severely restrict (or remove completely) the ability for SMEs to use simple derivatives for hedging (i.e. insurance) purposes. As we have argued, this would be a concerning move by the Government. Just because there has been widespread criticism of bank’s mis-selling interest rate hedging products to SMEs, does not mean that all SMEs should be denied the use of derivatives if they wish to choose them.

Bank ringfencing FT Article 16th Dec 2013

Nadia Patel

Nadia has a degree in Business Management and a Diploma for Financial Advisers (Level 4). She has ten years of experience in financial services. This includes FSA regulated adviser roles in HSBC, Halifax and Nationwide. As senior manager at Vedanta Nadia is responsible for managing the office, client contact and marketing for the business.

Nadia Patel

Nadia has a degree in Business Management and a Diploma for Financial Advisers (Level 4). She has ten years of experience in financial services. This includes FSA regulated adviser roles in HSBC, Halifax and Nationwide. As senior manager at Vedanta Nadia is responsible for managing the office, client contact and marketing for the business.