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Just when Britain's banks would have loved some positive publicity, the City watchdog - the Financial Services Authority - has said they were guilty of serious failings in the way they sold complicated products to small businesses that were supposed to protect those businesses from sharp rises in interest rates.

In practice, some of these swaps or interest-rate hedging products increased the borrowing costs of struggling companies or prevented them from taking advantage of the sharp fall in interest rates since 2008.

The FSA has found that 28,000 of these products were sold to small businesses since 2001. It said it found instances where the banks failed to explain the risks the customers were taking on, or did not disclose the big costs of cancelling in a proper way, or forced customers into naked speculation on the direction of interest rates.

Banks were motivated in these sales, said the FSA, by "rewards and incentives" for individual bankers, rather than the interests of clients.

Barclays, HSBC, Lloyds and RBS have all agreed to stop selling the most complex products, called structured collars, to retail clients, and to provide redress to those that bought the most complex products. The FSA will appoint independent reviewers at each bank to verify that the banks are providing restitution in an expeditious way.

But there was a little bit of respite in what has become almost the national sport of bashing Bob Diamond, the chief executive of Barclays.

Martin Wheatley, managing director of the FSA's Conduct Business Unit, said: "I am particularly pleased that the CEOs, Bob Diamond, Brian Robertson, Antonio Horta-Osorio and Chris Sullivan have provided a personal assurance that they will have responsibility for oversight of this [restitution] work and will ensure that complainants are treated fairly."

The devil will of course be in the detail, and one outstanding question is how ruthless the banks will be in restricting redress to those small businesses that are so small that they are the equivalent of retail customers in the FSA's rules.

You may recall that in the spring I highlighted the plight of Adcocks, a small electricals retailer in Norfolk, brought to the brink of collapse after it bought one of the notorious structured collars from Barclays.

It had one employee too many to be considered a retail customer, so it is not clear whether in future Barclays would be banned from selling this hedging product to the likes of Adcocks or whether the owner Paul Adcock will be able to escape from the financially crippling contract.