SMBC reprimanded over forced swaps sales

Japanese regulators have criticised Sumitomo Mitsui Banking Corporation for compelling customers to buy interest rate swaps in exchange for extended loans.

The Fair Trade Commission said small business customers of SMBC were told they could only receive loan extensions if they agreed to take the fixed side of interest rate swaps contracts as part of the package. Low interest rates meant the businesses ended up paying up to 200 basis points more than they would on a variable loan.

The FTC did not penalise SMBC, but ordered it to stop the sales and ensure the coercion did not occur again. "Several tens" of customers were coerced into buying swaps over the last four years, the FTC said.

SMBC has until December 12 to appeal against the decision.

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe

You are currently unable to copy this content. Please contact info@risk.net to find out more.

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here