"Finanzwende, a group of concerned citizens, has expressed criticism towards Wirecard's action plan"
Gerhard Schick, a board member of the "Citizens' Movement for a Financial Turnaround," has criticized Finance Minister Olaf Scholz's action plan against balance sheet fraud. Schick argues that the existing measures do not go far enough in ensuring effective oversight and preventing conflicts of interest.
In a series of statements, Schick has outlined several proposed reforms:
Strengthening BaFin’s Independence and Supervisory Powers:
Schick advocates for BaFin to be more independent from political influence and financial industry pressures. He emphasizes that BaFin needs enhanced authority and resources to detect and act decisively against accounting fraud and corporate misconduct.
Clear Separation between Property Rights and Consulting Services:
He insists on stricter separation between companies’ ownership interests (property rights) and the consulting or auditing services provided to those companies. This is to avoid conflicts of interest where consulting firms might prioritize business relationships over objective scrutiny, which can undermine the reliability of financial reports.
Reforming Governance and Accountability Structures:
Schick calls for reforms that ensure better transparency and accountability within BaFin and among external auditors. This includes preventing revolving-door practices where former supervisors or politicians move into consulting roles that could impair impartial supervision.
Enhancing Transparency and Public Reporting:
He supports increased public disclosure requirements for companies and auditors to help market participants better detect potential irregularities.
Schick views these reforms as necessary to restore trust in financial supervision and to prevent scandals arising from weak oversight and blurred lines between ownership and advisory roles in companies. His critique suggests that without such fundamental changes, efforts to combat balance sheet fraud will remain inadequate.
Furthermore, Schick has called for personnel consequences at the financial supervisory authority BaFin, and he hopes that through an investigative committee, more comprehensive tightening will come about than currently planned by Finance Minister Olaf Scholz.
In addition, Schick has suggested a stricter separation of property rights, beyond just a tightening of the separation between consulting and auditing. He believes that this separation is necessary to prevent a series of investment scandals and to ensure that the financial sector operates with integrity and transparency.
Schick's criticisms and proposed reforms come at a time when the German government is under pressure to address concerns about balance sheet fraud and financial misconduct following a series of high-profile scandals. His suggestions could potentially lead to significant changes in the way financial supervision is conducted in Germany.
Other recommendations from Schick include strengthening the independence and supervisory powers of BaFin, proposing a clear separation between property rights and consulting services, reforming governance and accountability structures, and enhancing transparency and public reporting. In the realm of general-news and politics, Schick's proposals address concerns around balance sheet fraud and financial misconduct in the German business sector.
