The Chancellor has urged the Financial Conduct Authority to rethink its plan to ‘name and shame’ companies under investigation by the City watchdog.  

“I hope the FCA re-look at their decision,” the chancellor told the Financial Times in an interview.  

His rare intervention in regulatory affairs comes after it emerged this week that the Association of Short Term Lenders and 16 other financial services firms asked Hunt to block the move, saying it could hit the valuations of firms and “destabilise financial markets”.  

The move by the regulator comes after it and the Prudential Regulation Authority were given new competitiveness and growth objectives by ministers last year.  

But Hunt says: “Last year the law changed in the financial services market and [the FCA] have a secondary growth duty.   

“On the basis of that I hope they re-look at their ‘naming and shaming’ decision because it doesn’t feel consistent with that new secondary growth duty that they have.”  

Other UK regulators — such as those in competition, water and energy — often name firms that are under investigation before deciding on whether they have breached any rules.  

However, this measure is rarely used by international financial services regulators such as the US Securities and Exchange Commission and Germany’s BaFin.  

Hunt says: “How you stimulate growth is different sector by sector, so I think it’s completely reasonable to name and shame a failing water company which has outrageous amounts of leaks.   

“But I think, in a financial services context, it’s different.”  

As many as 16 finance trade bodies — including UK Finance, The Investment Association and TheCityUK — have written to the Chancellor asking him to intervene.  

“Firms believe that the proposals will have a negative impact on their valuation, could put at risk the wellbeing of individuals, and have the potential to destabilise financial markets,” they said in a letter dated 26 April, but released earlier this week.  

The FCA has said its plan would boost transparency and increase the deterrent effect of its probes.    

The watchdog adds: “We embrace our secondary objective to facilitate international competitiveness and growth alongside the primary objectives given to us by Parliament to protect consumers, market integrity and effective competition.  

“As we have said throughout the process, this is a consultation.  We will listen carefully to the extensive feedback we have received, including from government as we reflect on our next steps.”