The amount paid in compensation by banks having mis-sold interest rate swaps has skyrocketed and passed £81 million in November, as a result of a review by the Financial Conduct Authority.

The amount paid in compensation by banks having mis-sold
interest rate swaps has skyrocketed and passed £81 million ($132.5 million) in
November, as a result of a review by the Financial Conduct Authority. This is
equal to a five-fold rise compared to the amount of redress in October.

The compensation process has been somewhat sluggish up until
now, but is finally picking up steam as new figures from the regulator revealed
that over three-quarters of 18,400 people invited to join the review have opted
to do so.

Conversely, only 34 per cent of compliance assessments have
been completed, yet 95 per cent of those completed were non-compliant, broadly
in line with the rates of non-compliance found since August.

The £81.2 million paid out so far has been paid out to only
547 customers who have accepted the offer, out of 6,100 who are in the redress
phase. Of those 6,100, the FCA has completed redress determinations of 3,300
and sent determination letters to 2,600.

“I welcome the fact that these figures show the pace of the
banks’ reviews continuing to increase and more businesses and customers are
starting to receive compensation payments, but we will keep the pressure on to
ensure they continue to move as quickly as they can,” said Clive Adamson,
director of supervision at the FCA.

In November, the number of redress offers accepted (547)
outpaced the number of outcomes where no redress was due (438) for the first
time since the review began.

“Last month we wrote to the CEOs of the four major banks to
re-assert our expectation that redress should be delivered to customers quickly
and to agree practical ways to speed up the process. The banks’ responses have
been positive, with three of the four major banks saying to us they now expect
to complete all initial redress determinations by May 2014,” added Adamson.

The momentum on the swaps redress has especially increased
after the financial watchdog said in November that banks needed to pick up speed in the review, with banks having at that time collectively paid out just £15.3 million with only 125 offers accepted by customers. Read more on that story here.