Status: 14.12.2022 1:30 p.m
Everyone is currently talking about the Wirecard bankruptcy, and the criminal proceedings against former managers began in Munich this week. The bankruptcy of billions is also a failure of BaFin.
“It’s going in the right direction,” says the head of the Federal Financial Supervisory Authority, or BaFin for short. Mark Branson explains to the Club of International Business Journalists in Frankfurt am Main that four of the six directors are new. There was also “a certain change” at the management level below. “We’re not the best regulator in the world, but we’re catching up fast,” Branson said. “We can’t do that in a year.” The BaFin departments for banks and securities used to be independent authorities. They would work better together now.
BaFin – a toothless tiger?
At the European Central Bank and the Bundesbank, which are also involved in banking supervision, BaFin is seen as a toothless office. It is true that such classifications reflect feelings of competition and the already high self-confidence of central bank employees. But the criticism of BaFin’s speed and competence is so broad that factual reasons are plausible.
He still sees a lot of potential in BaFin that is not being exhausted. “We want supervision with bite,” Branson said. In order for this to become concrete, the authority needs orientation and goals. However, BaFin has become bolder. “I’m trying to explain to our supervisors: It’s not a bad performance to see problems,” Branson said. “But it’s poor performance when something pops up and we didn’t see the warning signs.”
“There will be scandals”
Asked whether financial scandals like Wirecard would be prevented in the future, Branson said: “There will be scandals.” If there is a high level of criminal activity in companies, fraud can always occur. “The question is: How does the authority react to warning signals?”
The Briton Mark Branson had first made a career in banking and then developed a brilliant reputation as head of the Swiss financial supervisory authority. He was appointed Germany’s top financial supervisor by then Finance Minister Olaf Scholz after his predecessor was fired over the Wirecard debacle.
BaFin ignored warnings and took action against journalists who analyzed Wirecard’s business model. Branson’s first official annual report for 2021 states that the methodology “proved to be inefficient” at Wirecard.