Higher Charges For PPI and Other Scandals “Just a Daily Part Of The System” In UK Banking Industry

April 30, 2015
by admin in PPI News

Upon closer examination, credit rating agency Standard and Poor’s believes that banks, including smaller ones, set aside an amount that serves as their compensation shield in case regulation discovers gross bank employee misconduct or any rigging scandals.

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S&P’s investigation indicates that banks accept scandals and employee misconduct as a “consistent risk” where they put in some part of their profit for possible future scandal recompense.

It said that regulation has become more intrusive and UK media and claims management companies increase consumer awareness to a point that every error banks create will have claims rain on them.

With conduct and litigation charges reaching £14 billion in 2014, the amount is expected to lower to £6 billion the following year.

However, RBS and Barclays, both US regulated, would receive from the US Department of Justice their final amount of fines for forex manipulation. Barclays has bigger troubles because New York regulates its activities.

Meanwhile, the current total for PPI compensation is at £26 billion with S&P expecting it to increase £1 billion more as Lloyds will add £500 million more to the compensation pot.