The UK’s financial watchdog has said it was not expecting the “stern reaction” to its plans to “name and shame” firms it is investigating, after facing backlash from the City and the Government. The Financial Conduct Authority (FCA) defended the proposals and stressed that they were still being deliberated. Nikhil Rathi, the FCA’s chief executive, and chairman Ashley Alder were quizzed by MPs on the Treasury Committee on Wednesday. It followed the regulator revealing it was considering announcing when it has opened enforcement investigations into financial firms, which it currently only does in very limited cases. It would mean “naming and shaming” the companies being probed, regardless of whether or not it decides there has been misconduct or a breach of its rules. The move prompted widespread backlash, including from Chancellor Jeremy Hunt, who warned the watchdog to reconsider its plans over fears it could stifle growth and international competitiveness. Several trade bodies including the City of London Corporation and PIMFA also raised concerns that making investigations public could have a damaging impact on firms, their staff and customers, before any conclusions are reached. During Wednesday’s Treasury Committee hearing, Mr Alder said: “In truth, we weren’t at the time we...