SPD leader proposes tighter financial oversight
In response to the insolvent financial services provider Wirecard, Germany is taking decisive steps to enhance financial supervision and prevent similar cases from occurring in the future. SPD leader Norbert Walter-Borjans and Olaf Scholz, SPD chairman, have presented an action plan to prevent and detect criminal balance sheet manipulations.
Walter-Borjans stated that the action plan is an important step in preventing and detecting criminal balance sheet manipulations, and he calls for strengthening financial supervision to prevent future cases like Wirecard. He expressed gratitude to Scholz for his swift and decisive response to the Wirecard case.
The action plan includes several reforms and measures aimed at strengthening financial supervision, improving transparency, and enhancing control over emerging financial technologies. One key reform is the enhanced regulatory oversight by the German financial regulator BaFin, which will oversee ICT third-party service providers critical to the financial industry under the EU’s Digital Operational Resilience Act (DORA), effective January 2025.
Another significant change is the implementation of the DAC 8 Directive (Crypto and Finance Reporting), which extends reporting obligations to crypto-asset service providers. This measure, planned to come into force on January 1, 2026, aims to increase transparency on digital payment instruments and crypto transactions, making it harder to conceal illicit activities.
The new bill also incorporates the OECD's Crypto-Asset Reporting Framework and amends the Common Reporting Standard for financial accounts, harmonizing Germany’s rules with international standards to minimize circumvention risks.
BaFin has set ten strategic objectives focusing on improving supervision quality, transparency, and enforcement effectiveness. This includes enhanced monitoring of compliance with securities laws, as seen in recent enforcement actions against companies violating reporting duties.
The action plan also aims to protect all investors, in addition to taxpayers, from fraud and money laundering. It is expected to address the need for more effective balance control procedures.
Olaf Scholz's action plan for preventing and detecting criminal balance sheet manipulations is moving forward with a draft law to be presented soon, which intends to provide more effective protection against such manipulations. The draft law, as part of the action plan, is designed to ensure that cases like Wirecard are not repeated in the future.
According to Walter-Borjans, Wirecard is a serious criminal case that must not be repeated. He continues to emphasize the importance of strengthening financial supervision to prevent future cases like Wirecard.
The action plan includes further reforms of balance control procedures, in addition to strengthening financial supervision and other measures. Norbert Walter-Borjans was pictured in a recent photo, as reported by dts Nachrichtenagentur, expressing his support for the action plan.
In conclusion, these measures aim to close gaps that previously allowed Wirecard’s fraud to go undetected, by reinforcing control over emerging financial technologies, tightening reporting and transparency requirements, and empowering BaFin to act swiftly on irregularities. The action plan is seen as an important step in preventing and detecting criminal balance sheet manipulations.
other business sectors may need to review their balance control procedures in light of the new reforms to prevent similar cases of fraud; the action plan's implementation in politics and general news indicates a broader focus on enhancing financial supervision and transparency.
