If anything, the UK bank industry needs to resolve its £22 bn deficit from compound interest rates of mis-sold PPI from the 1990s.
During this time, insurance policies are added with credit cards, loans and other financing. These compound payment protection insurance policies increase in value as the consumer increases his or her risk of refusing to pay their loans.
Along with these increases and decreases, an 8 per cent interest rate annually pummels bank budgets to deal with inflationary values addressed during that time.
A possible way banks can resolve this matter is if they would address all single-premium PPI complaints efficiently.
Single-premium PPI policies have a fixed value that does not change with interest rates and inflation. While the £11.5 billion repaid for single-premium payment protection insurance policies might not be final, it would help banks to determine the compound interest rate values.
Once banks finish such, a simplified and objective PPI claims method can hasten the resolution of the crisis. It would also meet the proposed deadline by the FCA once finished.
However, it can create a huge influx of PPI claims for banks, which could overwhelm their systems.