The misconduct of banks and other creditors when dealing with small businesses can have grievous consequences, in some cases causing enterprises that may have long term viability to collapse due to short term, somewhat technical, "events of default" or ill-advised financial products that should never have been sold to them. At the CCP Research Foundation's Conduct Costs Project a great deal of work has been done on the banks' own "conduct costs", but the costs of bank misconduct extend beyond fines and balance sheets. Insolvency due to bank misconduct is undoubtedly costly to individual businesses. However, what are the broader social costs?

The latest CCP Research Foundation Associated Research Project, focusing initially on the sale of IRHPs to SMEs, will analyse the wider financial implications of insolvency where there is a demonstrable causal connection between a clear mis-selling of an IRHP and the business’ insolvency. The Project will, in due course, also look into law reform questions raised by the associated issues, in particular, whether or not current regulation and law addresses satisfactorily the need for proper redress and "business rescue" where the cause of business failure is not the business itself but bank misconduct.

The loss of otherwise viable businesses due to mis-selling of financial products is a phenomenon that has been highlighted in the media, but there has, as yet, been no thorough investigation into the cumulative cost of these losses. The primary goal of this study is to produce a comprehensive and forensic calculation of the costs of insolvency due to creditor misconduct.

For further details, see the Project's webpage here