Barclays allocates $1.6bn to pay penalties

Barclays has decided to create a $1.6 billion reserve to fund legal costs of scandals related to mis-selling financial products.

The Financial Services Authority recently ordered Britain’s four big banks to review their sales of interest rate hedging products, forcing Barclays, one of the four, to double the money set aside for potential payouts, reports FT.com.

The FSA found that the banks failed to meet regulatory requirements by selling 40,000 derivatives to “non-sophisticated” customers since 2001.

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The staff of Advisor.ca have been covering news for financial advisors since 1998.