German Finance Minister Olaf Scholz has announced plans to restructure financial services regulator Bafin after the body’s reputation took a blow in the scandal surrounding payment services company Wirecard.
It was now the task of legislators to “review and improve the protective mechanisms,” Scholz told the Frankfurter Allgemeine Sonntagszeitung newspaper.
Bafin must be given a direct right of intervention and the current two-stage examination procedure must be abolished, Scholz said. Furthermore, Bafin needed to be able to “conduct special audits on a large scale at any time.”
In addition, he wants to give the regulator “more rights of intervention in the control of balance sheets, regardless of whether the group has a banking division or not.”
Large payment service providers should generally be subject to financial supervision, and the institution could also be strengthened in terms of personnel, he said.
“If we come to the conclusion that the Bafin needs more money, more jobs and more competences, I will make every effort to ensure that this happens,” said Scholz.
Lawmakers across the board had called for a reform of the agency, which is under the supervision of the Finance Ministry.
Payment service provider Wirecard, which has been listed on the Dax for almost two years, recently admitted that 1.9 billion euros (2.1 billion dollars) that the company had booked to trustee accounts were very unlikely to exist.
The company has filed for bankruptcy and prosecutors are investigating former chief executive Markus Braun. The suspected balance sheet manipulations remained undiscovered for years. Wirecard processes cashless payments for merchants at cash registers and online.