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FRANKFURT (Dow Jones) – Federal Finance Minister Olaf Scholz (SPD) has announced a restructuring of the financial supervision as a consequence of the balance sheet falsification at the payment service provider Wirecard. It is now up to the legislator to “review and improve the protective mechanisms,” said the politician of the Frankfurter Allgemeine Sonntagszeitung. “Nobody should just hold their breath and hope that nothing happens. We have to clarify in all areas what went wrong.”
The necessary measures include a direct right of access by the Federal Financial Supervisory Authority (Bafin) and the abolition of the previous two-stage test procedure. The Bafin needed “the opportunity to be able to carry out large-scale special tests at any time,” said Scholz. He also wants to give the authority “more rights of access to 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.
The minister also announced changes to the auditors, who had not noticed the manipulations at Wirecard for years. “It will be discussed whether auditors need to rotate more often,” he said. “We also have to consider whether it works if a company advises and reviews a company at the same time.” However, Scholz expressed skepticism about a higher liability of the auditors. “If the idea of higher liability is just an excuse not to do anything else, then that’s not a smart way to go,” he criticized.
For more effective institutional control, Scholz also announced that Bafin would expand its staff. “If we come to the conclusion that Bafin needs more money, more jobs and more skills, I will do my best to make sure that happens,” he said. He took the acting head of the government Felix Hufeld under protection against criticism. “He does not shy away from the problems and also looks critically at his own actions,” said the minister. “If everyone does like him, we will get good results.”
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(END) Dow Jones Newswires
July 05, 2020 00:23 ET (04:23 GMT)