Chief executive of the Financial Conduct Authority (FCA) Andrew Bailey is working with parliament to create an "adequate complaint resolution mechanism" for small firms, he has said.
In an interview
with the Yorkshire Post on 24 January Bailey (pictured) said Britain was lacking a proper system for SMEs which have been mistreated by banks.
Banks were found to have missold interest rate hedging products to small firms from 2001, leading to
a full review
of the sales in 2013 and compensation payouts totalling hundreds of millions of pounds in the following years.
Some commentators had criticised the regulators for failing to act promptly. But Bailey said the industry was missing an independent adjudicator on such issues, similar to the Financial Ombudsman Service, which acts on behalf of consumers.
He told the paper: "One of the things that is very clear from looking at the recent cases, interest rate hedging... is a prime example, is that there's a missing piece, in my view, in the landscape. Which is, ‘How do small firms feel they can get independent resolution of their complaints, when they have complaints against banks?'
"All sorts of schemes have been put in place to deal with individual issues in recent years, but it's fair to say that small firms have strong doubts that this has been effective. It's in the interests of everybody, including the banks, that there is an effective dispute resolution mechanism for small firms."
He added: "I am very keen, and a number of MPs have now taken this up, and the Government have said they will look at it. I think it's very important that we have, for small firms in this country, an adequate dispute resolution mechanism."