The Financial Services Authority’s report on interest rate swaps mis-selling by four major banks draws some creditably momentous conclusions. Lawyers acting for business owners recognise a thorough job by the regulator, which concluded that banks failed in their regulatory obligations in 90% of the 173 sales reviewed by the City regulator.

But the FSA’s wider role has in effect been to collude with banks’ efforts to sit hard on claims that might arrive with a lawyer attached. Perhaps worried by the impact that full redress in all cases would have on banks’ precarious balance sheets, the regulator’s suggested solution is to steer as many claims as possible through a review process run by the banks – all of whom remain heavily lawyered-up.

As a tactic, this looks like so much realpolitik – few people want to bail out our banks for a second time. The trouble is that the review process, which is not even quasi-legal, does not seem to deliver for the banks or the business owners. Lawyers acting for business owners relate that the banks continue to ‘play hardball’. And problems that, if proved, have breathtaking implications for the banks continue to emerge – witness the linked issue of Libor-fixing.

Being allowed, in this context, to externalise many of the costs of past errors to business owners – claimant lawyers absent, of course – has hardly allowed the banks to draw a line under their woes. The FSA’s seeming aversion to legal due process is not really helping anyone.