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.”
Read more: Opinion: Wirecard debacle exposes cracks at Germany’s financial regulator
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 his firm “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.
dv/aw (AFP, dpa)