Sometimes it worked – but often it didn’t. The collapse of real estate financier Hypo Real Estate (HRE) hit Bafin cold in 2008. The Munich-based real estate bank had entered into off-balance-sheet risky “credit substitute transactions” through its Ireland branch Depfa, which broke the neck of the Dax group in the financial crisis – the troops of the then Bafin boss Jochen Sanio noticed this far too late. Also because there was a lack of personnel to oversee the internationally interlinked HRE as it would have been appropriate, but also because of internal inefficiencies.
Small success in this embarrassing scandal
The fact that the Bafin can sometimes be more tiger than a tame kitten is always shown when the personal motivation of individual employees is greater than the frustration with the lack of equipment. As with Frauke Menke, formerly head of department BA 1 (“Supervision of major banks and selected credit banks”). The money laundering specialist drove the grandeur of Deutsche Bank, which was caught up in all sorts of scandals, until it had acquired the reputation of being a godsee in Frankfurt. The relentless, sometimes cutting Menke was present at Supervisory Board meetings of the group to watch the bankers. Her investigative work cost numerous top managers of the bank the job and the institute heavy penalties.
But that alone will not be enough, the Bafin has also done too little in the Wirecard case, at least that’s how its critics see it. “The Bafin must carry out a more proactive supervision, which makes full use of possible measures and, if necessary, complains about gaps in politics. This authority must finally be more on the side of consumers and the common good,” says Gerhard Schick. The ex-Bundestag member of the Greens sat for years as an expert on the finance committee and is considered a luminary; today he heads the “Citizens Movement Financial Turnaround”. Schick goes to court with the Bafin in the Wirecard case: “That was a clear failure of supervision, and not for the first time with this authority.”
The Bafin, in turn, has repeatedly pointed out in the past that it could only check the bank subsidiary of the group, because it was only the bank subsidiary and not the entire AG that was under its supervision. Apparently Hufeld has made attempts to change that – whether that was sufficient will now have to be clarified.
Who is responsible for the Wirecard disaster?
Frank Schäffler, who sits on the Finance Committee for the FDP, wants Hufeld and Roegele to be primarily responsible, even if it is too early to ask for resignations. “But from my point of view this week it will become clear whether someone shouldn’t be responsible.”
The dissolution of the DPR in response to the scandal was “ridiculous”. Commissioning the “15-man association” with such important tasks as checking the balance sheets and ultimately only assigning one auditor for Wirecard is a structural defect. “A real stock exchange police must be able to intervene correctly if there is suspicion of manipulating the balance sheet,” says Schaeffler. From his point of view, the Bafin should have followed up much more intensively and ultimately had to pull the matter closer to her when the DPR kept months waiting for results in Wirecard.
In addition, Bafin must be able to supervise payment service providers like Wirecard as a whole. In fact, money laundering supervision in the Wirecard case falls neither in the area of office of Bafin nor in the DPR accounting police – but in that of the district government of Lower Bavaria.
According to Schick, Federal Finance Minister Olaf Scholz is responsible for regulating responsibilities and pushing ahead with the reorganization of Bafin. So far, he has finally touched the Bafin with kid gloves. “Now,” says Schick, “there are no more excuses.”