Comment: Banks should not underplay rate swap scandal THE mis-selling of insurance products to small firms is another hammer blow to the banks. It could also prove to be worse in terms of compensation and duration than the equally squalid mis-selling of payment protection insurance. Unravelling PPI took ten years and the Financial Services Authority (FSA) has already taken seven months to get this far on interest rate swaps, hedging products designed to cushion firms in the event of changes in rate. And it has only ruled on 173 cases among an estimated 40,000. A big problem is the complexity of the products and determining whether and how regulatory issues have been breached. Experts who have followed the scandal believe it will be messy and difficult to resolve, meaning that it could drag on for years. As for the level of compensation, estimates range from a few hundred millions to multi-billions, with Lloyds claiming it will have no material impact. Given that the initial estimates of the cost of PPI was seriously under-estimated, it would be wise to err towards the higher end of claims for interest rate swaps. Royal Bank of Scotland yesterday said it would increase its provision. Either way, the banks will want to avoid another significant hit to their balance sheets, but it will not be easy. Pressure is now mounting for the banks to cancel payments from firms, though there was no recommendation on this from the watchdog yesterday. What is more likely is that the banks may press for a limitation on claims, as they have on PPI, as a means of drawing a line under the scandal and ensuring it does not hang over them for several years. BlackBerry faces its make-or-break time FEW product launches have carried such a burden of expectation than the unveiling on Wednesday of a new smartphone from BlackBerry. It really is make-or-break for the company no longer known as Research in Motion which has adopted the name of its device and under new management has relaunched itself into the battle with Apple and Samsung. The once-ubiquitous BlackBerry has fallen well behind its rivals as it failed to keep up with the pace of change. The new BlackBerry 10 incorporates some new features of the sort Steve Jobs may have coveted, but with the company's market share in the key US market down to 2 per cent it is a long journey back to the big time. Black- Berry needs to win back customers who deserted it for flashier alternatives and head off cheaper smartphones also entering the market. If the new device fails, analysts see little hope for the company which faces being sold or broken up.