Banks breathed a huge sigh of relief last week when the Supreme Court ruled they were off the hook for billions of pounds worth of car finance compensation — and the celebration was shared by their shareholders.
If the court had ruled the other way it would have triggered a costly compensation free-for-all in which millions of drivers who had bought a car on finance could have claimed that it was mis-sold because of hidden commission in the deals.
• How drivers were sold a car finance compensation fantasy
Instead, in the aftermath of the judgment, which is likely to limit payouts considerably, shares in British banks surged. On Monday, Close Brothers, a car finance lender, rose 25 per cent in the morning and was still up 23 per cent by the end of the day. Lloyds Banking Group, which also has a car finance arm, was up 9 per cent. There is no doubt that some investors did very well out of the court’s decision.
It has sparked a sensation I know all too well — “fear of missing out”, more commonly known as “fomo”.
