UK: Regulator says small firms need more protection from banks

Britain’s financial regulator has begun investigating how banks treat smaller companies that have been sold products too complex for them to understand.

The Financial Conduct Authority said on Friday it was seeking views on whether small and medium sized enterprises needed more protection and access to the Financial Ombudsman Service, which has powers to demand compensation.

SMEs form the backbone of the British economy, accounting for 47 percent of private sector turnover and 60 percent of employment.

“We want people to tell us whether our rules are appropriate: do they strike the right balance between protecting small businesses and encouraging firms to offer services to SMEs, to compete and to innovate,” said Christopher Woolard, the FCA’s director of strategy and competition.

The watchdog’s own research has found that complex products, limited choice and that poorly managed expectations may expose SMEs to risk.

Full content: The Telegraph

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