Germany is looking to beef up the leadership of its Federal Financial Supervisory Authority (BaFin) and plans to hire top experts to oversee regulations, Bloomberg reported on Tuesday (Feb. 2).
Aside from hiring top-tier professionals, BaFin is also planning to develop a task force to investigate any suspected accounting fraud, according to Deputy Finance Minister Joerg Kukies. BaFin formerly relied on another regulator for accounting investigations.
“We want a stronger, proactive supervisor with more teeth,” Kukies told Bloomberg.
Finance Minister Olaf Scholz said the next BaFin leaders will have global expertise and the ability to “turn BaFin into a world-class supervisor.”
“We need to be able to compare ourselves with the very best,” he said at a briefing on Tuesday, per Bloomberg.
As part of the agency’s reorganization, BaFin President Felix Hufeld and Deputy President Elisabeth Roegele were let go Jan. 29 for failing to prevent the Wirecard scandal. A new president is expected to start in March.
Global payments firm Wirecard collapsed in June with almost $4 billion in creditor debt. At one time it was the fastest-growing FinTech. The firm’s chief executive, Markus Braun, was arrested last year and is in jail. His second in command is a fugitive.
BaFin has been under scrutiny ever since the Wirecard debacle occurred under the regulator’s watch. Commerzbank said last month that it had warned BaFin about Wirecard’s illicit activity early in 2020. Other firms also reportedly warned the regulator about Wirecard’s possible money laundering and fraud activity.
Commerzbank’s investigation surfaced when the German parliament turned its investigation to Wirecard’s big bank backers over the years. The banks facilitated a 2015 deal for Wirecard to buy two Indian payment companies, which is referenced in the fraud allegations against the group.