ESMA finds deficiencies in BaFin supervision of Wirecard's financial reporting

The peer review assessed the events leading to the collapse of Wirecard and the supervisory response by BaFin (Bundesanstalt für Finanzdienstleistungaufsicht) and the Financial Reporting Enforcement Panel (FREP). This focused on the application by BaFin and FREP of the Guidelines on Enforcement of Financial Information (GLEFI) and on impediments to the effectiveness of the German two-tier supervisory system for financial reporting in the specific context of the Wirecard case, according to the official press release.

The peer review, based on the assessment, identifies a number of deficiencies, inefficiencies, and legal and procedural impediments. These relate to the following areas: the independence of BaFin from issuers and government; market monitoring by both BaFin and FREP; examination procedures of FREP; and the effectiveness of the supervisory system in the area of financial reporting.