The accounting scandal surrounding the former payment service provider Wirecard is now affecting the cooperation between the Federal Ministry of Finance and the Federal Financial Supervisory Authority (Bafin).

Accordingly, the ministry wants to respect the operational independence of Bafin in exercising its legal and technical supervision.

In the future, supervisors should only report in larger cases.

These include critical developments at major corporations, effects on the stability of the financial market or serious damage to investors and consumers.

Markus Fruehauf

Editor in Business.

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Only then will the ministry want to be informed.

This enables the ministry to fulfill its statutory supervisory mandate.

At the same time, Bafin's personal responsibility for individual supervision is preserved.

Since August, the supervisory authority has been headed by Mark Branson, who came from the Swiss financial regulator Finma.

The new finance minister is Christian Lindner.

The Wirecard scandal had no consequences for his predecessor Olaf Scholz, who is now Chancellor.

On the other hand, former Bafin President Felix Hufeld had to resign in January 2021 because the scandal surrounding stock transactions by Bafin employees and the controversial short sale ban on Wirecard shares with the simultaneous criminal complaint against journalists who reported critically from the "Financial Times" put Bafin in a serious credibility crisis had fallen.

Branson, a Briton with Swiss citizenship, is now to fundamentally renew the authority.

The relationship with the Ministry of Finance, which has legal and technical supervision of the Bafin, is of crucial importance for this.

In February 2019, the Wirecard investigative committee of the German Bundestag very critically questioned the role of the Ministry of Finance in the controversial ban on short selling of shares in the then Dax company.

Because the Bafin measure gave the impression that the supervisor had to protect Wirecard from unscrupulous speculators.

Bolder action by supervisors

After the Wirecard scandal, the Bafin was given additional powers, including the audit of the balance sheet, which is currently the focus of the real estate company Adler scandal.

The new Bafin President Branson likes the longer leash that Finance Minister Lindner is letting his authority use.

After all, public relations work is now the sole responsibility of Bafin.

Interviews that Branson conducts with the media will no longer be approved by the ministry.

"As financial regulators, we need to be able to act boldly, clearly, quickly and responsibly," Branson said.

"As a public authority, we are clearly accountable." In his opinion, the streamlined principles set a modern and risk-oriented framework.