Interest Rate Swaps: Businesses in Financial Distress (major banks review process)
Businesses with interest rate swap arrangements which consider themselves to be in financial distress should contact their bank to discuss the situation.
The banks will review and consider each case carefully, and on a case by case basis, where the bank determines financial distress to be present in relation to meeting ongoing swap payments, the bank, will, at the customers request, suspend the collection of swap payments pending the outcome of the formal review by the independent skilled person being conducted in conjunction with the Financial Services Authority (FSA). In these circumstances when the bank agrees with the business to suspend swap debit payments from the business account, the suspension of payment does not constitute any acknowledgment of wrong doing on the part of the bank and the bank will reserve all its rights including with respect to the suspended payments and/or any other defaults.
The banks remain committed to addressing the Interest Rate Swap review as quickly and as fairly as possible with businesses and are working closely and cooperatively with the FSA and the skilled independent reviewers appointed by the FSA to do soâ€ª.