U.S. Markets closed

UK watchdog says rate swaps compensation totals 1.5 million pounds

LONDON (Reuters) - Britain's markets watchdog said on Friday banks have so far paid out 1.5 million pounds ($2.4 million) compensating small businesses mis-sold complex interest rate hedging products.

The products were designed to protect smaller companies against rising interest rates, but when rates fell, they had to pay large bills, typically running to tens of thousands of pounds. Companies also faced penalties to get out of the deals, which many said they had not been told about.

The Financial Conduct Authority said last month that, by the end of August 10, offers of redress totalling 500,000 pounds had been accepted by businesses.

(Reporting by Matt Scuffham; Editing by Steve Slater)