Germany to overhaul regulator after Wirecard scandal
Germany plans to restructure its financial services
regulator BaFin after the watchdog's reputation took a hit in the Wirecard
scandal.
"We need far-reaching reforms," German Finance
Minister Olaf Scholz told the Frankfurter Allgemeine Sonntagszeitung newspaper,
saying it was now up to legislators to "review and improve new protective
mechanisms."
Wirecard, a digital payments service, filed for bankruptcy
last month after admitting €1.9 billion ($2.1 billion) was missing from its
accounts. The firm's former chief executive, Markus Braun, is under
investigation by federal prosecutors.
The scandal sparked criticism of auditors and regulators
meant to be overseeing the firm. BaFin head Felix Hufeld has admitted it
"had not been effective enough" in monitoring Wirecard.
Scholz said Germany should abolish the two-stage examination
procedure in which BaFin only intervenes when red flags are raised during an
initial audit by a private monitoring body. That would allow for the nation's
financial regulator to directly intervene, according to Scholz.
Moreover, Scholz wants to give BaFin "more control
rights over financial reports, regardless of whether the company has a banking
division or not." He said large payment providers should be subject to
financial supervision in general.
Scholz added that the institution, which is under the
supervision the finance ministry, should be strengthened in terms of personnel.
"If we come to the conclusion that BaFin needs more
money, more jobs and more competency, I will make every effort to ensure that
this happens," the finance minister said.
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