- In the UK, the mandates of national financial supervisors were expanded in 2023 to include a secondary objective of international competitiveness and economic growth alongside financial stability. The aim is for regulation to support innovation, investment and market attractiveness.
- The reform has brought about concrete changes, such as more relaxed listing rules and easier access to capital markets, although the supervisory culture remains somewhat cautious and risk averse.
- From the viewpoint of supervisors, the greatest benefits of the expanded mandate lie in the balance the model provides: promoting competitiveness and growth alongside of stability supports long-term growth without undermining confidence.
In the United Kingdom, the mandates of financial supervisors were expanded in 2023 to incorporate the promotion of international competitiveness and economic growth. The Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), the two main UK financial supervisors, are now required to consider the impact of their operations on innovation, investment and market attractiveness.
The UK solution offers food for thought also in the European Union, where strengthening competitiveness has been a hot topic in economic debate in recent years.
“The Competitiveness Compass that was published by the Commission in early 2025 sets a clear framework and objectives for improving European competitiveness”, notes Finance Finland’s Director of EU Affairs Mari Pekonen-Ranta.
The Commission has recently emphasised the importance of growth. For example, at the Less Is More seminar organised by Finance Finland in November 2025, Michael Hager, Head of Cabinet to EU Commissioner Valdis Dombrovskis, stated that the mandate of financial supervisors should be expanded to include the promotion of competitiveness in addition to their existing objectives. At the same event, Sara Mella, head of personal banking at Nordea and chair of Finance Finland’s Board at the time, likewise proposed a new competitiveness mandate for supervisory authorities in Finland and in the EU.
Progress has been made, but caution persists
According to a 2025 report by the House of Lords, the new secondary international competitiveness and growth objective – the competitiveness mandate – which has been in place in the UK for two and a half years, has proved a positive and necessary reform and a valuable stimulus for the regulators. The PRA and the FCA have taken a number of concrete steps, including changes to listing rules, measures to facilitate access to capital markets and adjustments to the prudential framework, such as solvency rules and capital requirements.
“Progress has certainly been made, but the supervisory culture has not yet really shifted in a way that would make it more supportive of competitiveness and economic growth”, Pekonen-Ranta notes.
According to Pekonen-Ranta, the UK still suffers, like much of Europe, from a deeply entrenched post-crisis culture of risk aversion, slow decision-making and complex and difficult-to-predict regulation.
“The UK national supervisors have said that they still don’t have a clear sense of how financial sector regulation could help support growth in the economy at large”, Pekonen-Ranta points out.
What conclusions should be drawn in Finland?
The financial sector plays a significant role in driving economic growth, and the lessons learned from the UK are useful when considering how a competitiveness mandate could be implemented in Finland and in the EU.
“Although the regulatory powers of financial supervisors differ between the UK and the EU, the Finnish Financial Supervisory Authority already has the ability to influence competitiveness for example through macroprudential tools and the guidelines, recommendations and regulations it issues. The European supervisory authorities play a key role in preparing lower-level regulation and guidelines, which enables them to influence the attractiveness and efficiency of EU financial markets”, Pekonen-Ranta says.
In the UK, the competitiveness mandate has been set as a secondary objective, meaning that national supervisors are required to promote competitiveness and economic growth only when their primary objectives, such as consumer protection, market integrity, financial stability and effective competition, have been secured.
“This distinction is important to keep in mind. Promoting competitiveness and economic growth matters a great deal, but the main task of supervisors – safeguarding financial stability – must not be overlooked”, Pekonen-Ranta says.
Long-term objectives must also be kept in view: short-term gains should not be pursued if they jeopardise long-term economic growth or financial stability.
According to Pekonen-Ranta, the UK’s example shows that supervisors need to be encouraged to take sensible risks and to support innovation.
“The British government has backed the local supervisory authorities as they have worked to implement their new mandate. If the promotion of competitiveness and economic growth becomes part of the Financial Supervisory Authority’s role in Finland, our legislation will need to support that by providing a clear regulatory environment”, Pekonen-Ranta emphasises.
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