Martin Berkeley, FCA authorised derivative expert at Vedanta Hedging was interviewed for the BBC Website about the interest rate swap mis-selling problem affecting many SMEs
“Wales was seen as easy pickings. It was a feeding frenzy – the care sector and caravan parks particularly.
“Wales has a large rural economy and that was targeted by the banks. Banks like the agricultural sector because there is good lending which is low risk. Banks don’t like to take risks.
“The other reason that Wales was targeted was because it had been neglected, it was seen as virgin territory. North Wales was particularly productive and they did a lot of business in Aberystwyth.”
He said local bank managers would be approached by their seniors and forced to introduce customers who wanted big loans to the interest rate swaps team.
“Managers would have to go through their book of loans and choose the ones to go to the swaps team,” he said.
“If they didn’t they could face disciplinary measures. If the sale went through they would receive a credit or bonus.
“There was a tendency to try to sell the most profitable products to the customer. Many customers didn’t understand them.”
The full BBC website news story can be seen here