Auditors To Cash In On Bank Mis-Selling

The 'big four' accounting firms are set to reap fees running into millions of pounds for supervising the clean-up of the latest bank mis-selling scandal.

I understand that HSBC has hired Deloitte and Barclays has appointed KPMG to act as the independent reviewers of their sales of interest rate swaps to small business customers.

The four biggest banks agreed with the Financial Services Authority last month that they would examine the sale of tens of thousands of these swap products, which were designed to protect against fluctuations in interest rates but which were often inappropriately sold.

While there is no suggestion that the major audit firms were complicit in the practice, some senior bankers I have spoken to have expressed discomfort at the likely fees bonanza for the accountancy profession that will result from the review process.

In its statement last month, the FSA said: "Not all businesses will be owed redress, but for those that are, the exact redress will vary from customer to customer, but could include a mixture of cancelling or replacing existing products, together with partial or full refunds of the costs of those products.

"This exercise will be scrutinised by an independent reviewer at each bank appointed under the FSA's powers."

Last week the FSA announced that seven more banks would also join the review process.

Barclays and HSBC declined to comment.