As Europe seeks solutions to strengthen its global competitiveness, proposals have emerged to give financial supervisors an explicit competitiveness mandate. However, according to a recent article published by the European Insurance and Occupational Pensions Authority (EIOPA), such a move would largely miss the root causes of Europe’s economic challenges.

EIOPA argues that competitiveness is primarily influenced by factors such as taxation, market structure, labor conditions, innovation, access to capital and energy costs - areas that fall outside the remit of financial supervisors. Instead, the Authority believes its role is to support competitiveness indirectly by promoting a well-functioning Single Market, supervisory consistency and regulatory proportionality.

The Authority warns that weakening supervisory standards in the name of growth could undermine financial stability and erode trust, which remains one of the insurance sector’s most valuable assets. Insurance and pension systems depend on long-term confidence that companies can honor their commitments even during periods of economic stress.

Rather than expanding supervisors’ mandates, EIOPA advocates for smarter regulation, simplified reporting requirements, deeper capital markets and further integration of the European Single Market. In its view, a stable, resilient and trusted financial sector is itself a key driver of sustainable competitiveness.

The Authority concludes that Europe’s competitiveness challenge should be addressed through policy reforms rather than by redefining the role of independent supervisors, whose primary mission remains the protection of consumers and the safeguarding of financial stability.

More on this topic: Op-ed: An explicit competitiveness mandate for EIOPA would miss the point