Barclays has come under more pressure after the FSA named it as one of four banks to have mis-sold interest rate swaps to thousands of small businesses.

The news comes after Barclays was fined for manipulating Libor. The bank will now additionally be required to compensate customers who lost money after they were sold products as part of a strategy to protect against movements in interest rates. Other high street banks involved in the misselling include Lloyds Banking Group, Royal Bank of Scotland and HSBC.

The products, which were meant to protect businesses against rising interest rates, were found to have "serious failings". The FSA said it believed the practice had a "severe impact on a number of these businesses".

The mis-selling began in 2001, affecting the exchange of around 28,000 financial products. The FSA said there had been a lack of clarity about the costs of stopping a product, failure to adequately check whether customers understood the risks involved, and selling based on personal reward rather than business needs.

Lloyds has said that it agreed to carry out a full assessment of this practice with the FSA.