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Dutch bank ING has set aside an extra €150m to compensate small companies to which it sold interest rate derivatives.

In the years leading up to the financial crisis, banks sold thousands of interest rate derivative contracts to small and medium sized enterprises when they took out loans to protect them against rises in interest rates. However, in many cases, the companies were caught off guard when interest rates actually fell dramatically and they were liable to cover the losses.

ING said it:

will adopt the framework for compensation of Dutch SME clients with interest rate derivatives, as presented by the committee of independent experts. As a consequence, ING expects to increase its provision for this issue by around EUR 150 million, to be booked in the second quarter of 2016.

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