Germany to revamp financial oversight after Wirecard scandal

File—Picture taken June 24, 2020 shows the Wirecard logo at the headquarters of the payment service provider in Aschheim, Germany. (Sven Hoppe/picture-alliance/DPA via AP, file)

BERLIN — Germany’s finance minister says he wants to revamp the oversight system for the country’s financial industry in the wake of the accounting scandal at payment systems provider Wirecard.

The Munich-based Wirecard filed for bankruptcy recently after auditors couldn’t find accounts in the Philippines that were supposed to contain 1.9 billion euros ($2.1 billion). The company’s former CEO was arrested and released on bail, while its former chief operating officer is on the run.

Finance Minister Olaf Scholz told German weekly Frankfurter Allgemeine Sonntagszeitung in an interview published Sunday that he wants to empower the country’s financial supervisory authority, BaFin, to conduct unannounced checks at any moment.

He also proposed ensuring that BaFin has oversight of large payment processing companies — even if they don’t fall neatly into the category of a financial institution — and discuss whether auditors need to rotate more frequently

German authorities have been criticized for failing to step in sooner despite reports of irregularities dating back at least five years.

Fabio De Masi, a lawmaker with the opposition Left party, largely welcomed the proposals but called for a lower threshold of liability for auditors’ failings.

/MUF