Keynote delivered by the Director General of the Financial Supervisory Authority, Tero Kurenmaa at the International Bankers Forum
The Director General of the Financial Supervisory Authority (FIN-FSA) Tero Kurenmaa delivered the following keynote at the panel discussion of the International Bankers Forum (IBF) on 28 May 2026:
Supervision and Competitiveness
Dear colleagues,
The question of competitiveness has moved rapidly to the centre of the European policy debate. Mario Draghi’s report on the future of European competitiveness argued that Europe needs substantially higher investment in order to raise productivity and strengthen growth. The report called for deeper European capital markets: progress on the Savings and Investment Union, and stronger risk-bearing capacity in both banks and non-bank financial institutions.
These themes have since become visible not only in the Commission’s agenda, but also in the work of public authorities. In December 2025, the ECB’s high-level task force on simplification published its report on the European prudential regulatory, supervisory and reporting framework. Its proposals included simpler capital requirements, a more risk-based supervisory approach, and a reduction in reporting burdens. So competitiveness is no longer merely a political slogan. It is now shaping the regulatory and supervisory debate as well.
This has also prompted a broader question: should competitiveness be added explicitly to supervisors’ mandates?
That idea has been advanced by parts of the financial sector and by industry associations. The example often cited is the UK Prudential Regulation Authority, which has had a secondary objective relating to competitiveness and growth since 2023.
But what would such a mandate actually mean?
The UK example is instructive because competitiveness there is clearly a secondary objective. The PRA’s primary objective remains the safety and soundness of the firms it regulates, and the protection of insurance policyholders. In other words, stability comes first. Only after that does the PRA seek, as far as reasonably possible, to advance competition and medium- to long-term growth.
To my mind, that sounds rather familiar. It is not fundamentally different from the European way of thinking. In Europe too, financial stability is the foundation. Other policy goals may be pursued, but not at the expense of stability.
So the key question is not whether competitiveness matters. Clearly it does. The more relevant question is how it should matter for supervisors.
If we look at the PRA’s own examples, the practical implications of such a mandate have so far not been especially exotic. They include the implementation of major regulatory reforms, updates to insurance regulation, support for new firms entering the market, and efforts to simplify reporting. All of this sounds very familiar from a European perspective.
Here, however, we should note one important institutional difference. In the European Union, we are supervisors, not legislators. The core regulatory texts are adopted at European level and then implemented in national legislation. More detailed standards and guidance are developed by the European supervisory authorities. So while we contribute to this framework, we do not rewrite it on our own.
That said, when I compare the Finnish Financial Supervisory Authority’s recent work with the kinds of actions cited by the PRA, I do not see any essential difference in substance. We too have supported simplification, risk-based supervision, and smoother interaction with supervised entities.
There is, however, a deeper conceptual question: competitiveness of whom?
Are we talking about the competitiveness of banks? Of the financial sector as a whole? Of European capital markets? Or of the customers of financial institutions and of the wider economy?
From the perspective of the Savings and Investment Union, I would argue that we must think broadly. Competitiveness is not only about banks. It is also about capital markets, investment products, market infrastructure, insurers, funds and the wider financing ecosystem.
But even if we focus just on banking, the question remains: competition where? At national level, at European level, or globally?
From a national perspective, greater competition may well be desirable. In Finland, for example, the banking market is highly concentrated. From a European perspective, however, the debate looks rather different. Europe may well need larger and stronger cross-border institutions if it’s to compete effectively with the largest global players, particularly those in the United States. In that sense, competitiveness may point not to more fragmentation, but to greater scale and integration within Europe.
A further question is whether competitiveness is sometimes really shorthand for lower capital requirements. That is often the implication when banks or their representative bodies call for lighter prudential requirements in the name of growth and lending capacity.
Here I would be somewhat cautious. Capital serves a vital purpose: it absorbs losses. And while equity is costly, it is also valuable. Strong capital buffers support resilience and enable institutions to take risk in a controlled manner. So while it is perfectly reasonable to debate calibration, I would be careful about treating capital simplistically as an obstacle to competitiveness.
Let me conclude.
A competitiveness mandate is certainly an interesting idea. But it remains, at least for now, a rather unclear and insufficiently defined concept. Before we decide whether supervisors should be given such a mandate, we should be much clearer about what it is intended to mean, whose competitiveness it is supposed to enhance, and how exactly it should affect supervisory practice.
“Decisions on what risks should be borne and by whom are fundamentally political and should be decided by the Government,” UK peers said in their recent report on how regulators can support growth.
Our primary objective must continue to be stability. In the end, competitiveness is built on stability — on trust, resilience and a predictable operating environment.
Thank you for your attention.