Germany’s financial markets regulator BaFin will become more proactive as fallout from the Wirecard scandal continues to spread. The German-based digital payments service recently admitted to losing €1.9bn from its books, or more specifically to not even knowing if the money was ever there in the first place. It has since filed for bankruptcy, disrupting credit card payments issued by the companies that worked with it across Europe. Finance Minister Olaf Scholz has been forced to admit that Germany’s financial regulation system is in need of “far-reaching” reform. He’s recommended overhauling the regulator BaFin’s practice of only intervening when red flags arise and giving it more control rights over financial reports. Crucially, this would even apply to companies that didn’t have a banking division. What’s disturbing in the Wirecard case, and has yet to be fully explained, is why BaFin didn’t do more, sooner, as red flags had already been raised in the case of Wirecard even before auditors were forced to admit the company was in trouble.
