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Jonathan Fisher QC gives legal opinion on excluded loans

The Treasury Committee has published Jonathan Fisher QC’s legal opinion on the so-called 'embedded swap' loans, which were sold to up to 60,000 mainly small and medium-sized businesses.

He advised that the Financial Conduct Authority (FCA) has no powers to act on thousands of small business loans containing interest-rate swaps.

The financial watchdog launched a review of interest-rate swaps that were sold alongside loans to small businesses, leaving them with huge bills when interest rates unexpectedly plunged which resulted in some £1.8bn in compensation being paid out in the wake of the 2008 financial crisis.

But twice as many such swaps were “embedded” within loans, and then sold, and Jonathan Fisher QC has told the Treasury Committee the FCA was right to say it had no power to force a similar review of these products.

Mr Fisher, in a legal opinion which was published by the Committee, warned that there was a gap in the law.

Martin Wheatley, chief executive of the FCA, has admitted that embedded swap loans carried the same mis-selling risks as standalone IHRPs, a point conceded by Clydesdale chief executive David Thorburn when he was called to give evidence to the Treasury Committee on the issue last June. Since then Clydesdale has set up its own review of such loans, though only at a customer's request.

Read the full articles on The Herald and The Independent.

Jonathan Fisher QC is ranked by the Legal Directories as one of the UK’s leading barristers in cases involving banking and financial services regulation.

Jonathan can be contacted to discuss any of the issues raised in the article at

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The views expressed in this article represent those of the author and not Bright Line Law.

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