Britain's banks pay out $804 million for swaps mis-selling

LONDON, March 5 (Reuters) - Britain's biggest banks have sofar paid out 482 million pounds ($804 million) from around 4billion set aside to compensate small firms mis-sold complexinterest rate hedging products, the financial regulator said.

The Financial Conduct Authority on Wednesday urged smallfirms that have not yet joined a compensation scheme to do so,saying that the banks' offer to pay 8 percent annual interest ontop of compensation was a "fair alternative" to them puttingtogether claims for consequential losses.

The products were designed to protect smaller companiesagainst rising interest rates but, when rates fell, they had topay large bills, typically running to tens of thousands ofpounds. Companies also faced penalties to get out of the deals,which many said they had not been told about.