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Manchester lawyer joins top U.S regulator at European Parliament hearing on banking misconduct
One of Manchester’s leading commercial litigation experts gave evidence to a panel of European Union lawmakers this week - alongside top U.S. financial regulator Gary Gensler - at a public hearing called to investigate misconduct on the part of UK banks.
Andrew Farrell, head of commercial litigation at Manchester law firm JMW Solicitors, was invited to appear at the European Parliament’s special hearing in Brussels on Monday (24th September). He gave evidence on how recent banking scandals, including LIBOR rate fixing, have affected small and medium size businesses (SMEs).
Andrew, who is an expert in the mis-selling of Interest Rate Swap Agreements (IRSA) – complex financial products that were sold by banks on the basis they would protect businesses against interest rate rises - was asked to provide evidence on the impact the scandals have had on trust between banks and SMEs and what measures are needed to protect businesses going forward.
JMW Solicitors is currently acting for more than 30 small and medium-sized businesses which were mis-sold IRSAs, the latest furore to hit the UK banking sector. As interest rates have fallen, businesses which were mis-sold the products have struggled to meet unexpected additional costs in the form of bank charges that are usually thousands of pounds per month.
Andrew Farrell, head of commercial litigation at JMW Solicitors, said: “In their role as legislators, MEPs are looking to decide what measures are necessary to change the culture of UK banks.
“In the case of IRSAs, it’s clear that banks were motivated by sales targets, profits and bonuses and the question as to whether these products were suitable for customers was not asked. As a result many businesses have suffered significant financial penalties and some have even been wound up.
“The Financial Services Authority has investigated the issue and agreed a scheme for compensating some customers, but many SMEs are still concerned that they will not achieve a proper level of compensation without pursuing legal action.
“SMEs’ trust in banks is extremely low and MEP’s are considering what form prohibitive legislation might take. One option is to introduce personal accountability for bankers, which lawyers and accountants face. This could deter future misconduct and also provide a platform for an improved culture within the banks, on which trust might then be re-established.”
The public hearing, held by the European Parliament’s Economic and Monetary Affairs Committee, also heard from Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission, who addressed MEPs on the issue of the manipulation of interbank lending rates. Appointed by Barack Obama in 2009, Gensler was responsible for levelling a $200 million fine against Barclays, accusing the bank of trying to manipulate Libor.
Michel Barnier (European Commissioner for Internal Market and Services), Joaquin Almunia (European Commissioner for Competition) and Daniel Doctoroff (CEO and President of Bloomberg) also gave presentations to the hearing which was chaired by North West MEP Alrene McCarthy.
Note to Editors
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