Germany’s finance ministry grants more independence for financial watchdog

BERLIN (Reuters) – Germany’s BaFin will have more leeway and independence in conducting its work as the country’s financial watchdog, the Finance Ministry said on Tuesday.

BaFin’s reputation was battered after it failed to spot wrongdoing ahead of the collapse in 2020 of the German payments company Wirecard, a former blue-chip hailed as a German success story and once worth $28 billion.

Some financial experts had said that as part of the finance ministry, BaFin may face too much influence from politicians if supervision efforts rub against their goals, adding that BaFin needed greater independence from Berlin to restore credibility.

According to new cooperation principles between the two authorities presented on Tuesday, BaFin should only inform the ministry in critical cases, for example when a large corporation is involved or if there is an impact on financial markets stability.

BaFin’s president Mark Branson said the new principles set a contemporary and risk-oriented framework for the authority.

“As financial supervisors, we need to be able to act boldly, clearly, quickly and responsibly,” he said.

(Reporting by Riham Alkousaa; Editing by Emelia Sithole-Matarise)