A clutch of UK banks have been found guilty by the Financial Services Authority of mis-selling interest-rate swaps to small businesses, capping off a miserable week for the City amid the fallout from the Barclays Libor scandal.

Following a two-month review, the FSA this morning revealed "serious failings" at Barclays, HSBC, Royal Bank of Scotland and Lloyds Banking Group and incentive-driven practices of selling the interest-rate hedging products to small and medium sized businesses.