LONDON (Reuters) - A debate is needed on when it is right for regulators to names companies they are investigating, Bank of England Governor Andrew Bailey said on Thursday, as Britain's financial watchdog pursues its 'naming and shaming' plans despite finance ministry opposition.
The Financial Conduct Authority (FCA) has proposed naming companies it is investigating early on, if in the public interest, as opposed to the current practice of after a probe has been concluded.
The plans have triggered widespread opposition from the financial sector and finance ministry.
The FCA says it would improve 'deterrence', but firms worry that being named early could dent their share price and reputation, especially as investigations can last many months, even if they turn out to be innocent.
"I think what needs to be debated and brought to conclusion is the tension," Bailey said, referring to a clash between the principle of innocent until proven guilty, and the need for regulators to stamp out mis-selling to consumers quickly.
"I think we need to get back to how we can reconcile those two potentially conflicting principles, rather than in a sense, say 'you can't do this, you can't do that'. There is an issue there, we should think about all the ways we can possibly solve that tension," Bailey told a news conference.
The FCA on Wednesday told lawmakers it has made no final decision as it considers the "stern" feedback and what criteria it could use for naming a company early.
Financial services minister Bim Afolami said on Wednesday the FCA should focus on its core role of keeping markets orderly and stop proposals such as "naming and shaming" that send the wrong signals to international investors.
(Reporting by David Milliken, Andy Bruce and Huw Jones)
