The financial world’s focus on the current Wirecard scandal plus the waves of controversy caused by it, has compelled Germany’s finance minister to strive for a reform of the local German financial watchdog.
The minister, Olaf Scholz, released a statement this Sunday where he explicitly said that the Federal Financial Supervisory Authority’s, or better known as BaFIN, powers should be increased. One of the main new responsibilities of the German overseer should be to conduct unannounced check-ups on financial institutions
Scholz also wished that BaFIN’s oversight would expand to large payment processing companies, even if they are technically not, as of yet, categorised as financial institutions.
Wirecard, whose role is pivotal in the €1.9 billion scandal, became insolvent. It was revealed that the fraud span over a year. In fact, reports of irregularities within Wirecard date back to 5 years, at the least. This is one of the reasons why BaFIN has seen some criticism lately.
Furthermore, the fall of Wirecard turned out to be an massive embarrassment for Germany. Even the spokesperson for Angela Merkel deemed it “a scandal which is almost unprecedented in the world of finance.” It appears that this goes far beyond the financial industry.