Branson announced a tougher approach to overseeing financial corporations and bolder decisions.
(Photo: Jann Höfer for Handelsblatt)
Munich The new President of the Financial Supervisory Authority, BaFin, does not see the agency as having reached its goal of ambitious restructuring. “A lot of impulses have been set. But after half a year we’re not there, ”said Mark Branson in an initial interim balance on Wednesday. The Federal Financial Supervisory Authority (BaFin) must be more courageous, act faster and take more risks in order not to intervene too late. “It takes several years until we are everywhere at the level that we are striving for,” said the former head of the Swiss financial market regulator Finma, who moved to Bonn in August. He had noticed a spirit of optimism.
Experts criticized the BaFin because it was often too bureaucratic and too detailed and overlooked major risks in the financial sector. As a consequence of the accounting scandal at the payment service provider Wirecard, Federal Finance Minister Olaf Scholz (SPD) initiated a reform of the authority subordinate to his ministry, in which it was to receive more competencies and rights of intervention. BaFin boss Felix Hufeld has been replaced by Branson.
The 52-year-old embodies the cultural change credibly, said the financial expert of the Greens in the European Parliament, Sven Giegold. “A powerful financial supervisory authority must actively intervene and push the limits of its mandate instead of hiding behind paragraphs.” It has to develop more bite, especially when it comes to financial crime and money laundering. This is in the spirit of the native British Branson: “If you wait until you have the latest information, you may be too late,” he warned. “After all, we have the mandate to work against grievances.”
For this, BaFin needs financial experts instead of lawyers – otherwise Branson would be in a lost position, said banking professor Hans-Peter Burghof from the University of Hohenheim to the Reuters news agency. “This legal culture is difficult to crack. Branson has a tough job. ”
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Branson wants to force the use of technology in order to make BaFin more effective. The authority has some catching up to do in terms of efficiency. “It depends on how we work.” In future, the supervisors should have all the data about their banks digitally available on one interface.
Culture change instead of new structures
In Branson’s view, restructuring within BaFin would be the wrong approach. Better networking of the various supervisory areas, such as banking supervision with money laundering control, is more important. This is especially true for big banks. “That can be solved culturally and not just structurally,” he said. “That takes time.” BaFin keeps a close eye on 17 large, complex banks, insurers, securities firms and payment processors with a “focus supervision” – even with its own staff on site, where it previously had to use the Bundesbank.
State Secretary for Finance Jörg Kukies said that two thirds of the measures had already been implemented. Of around 150 newly created positions, 80 percent are filled or about to be. “The modernization is of course a long-distance run. But we’re seeing the first successes. ”Bank professor Jan Pieter Krahnen from Frankfurt’s Goethe University sees the dependency on the finance ministry as one of the roots of the evil:“ In practice, you don’t make an important decision without the minister having seen the proposal . ”It would be better to have BaFin checked by the Bundestag. Branson and Kukies emphasized that operationally the authority could act completely independently. “But of course we have an accountability,” added Branson.
As part of the reform, BaFin will also take care of the control of the balance sheets of listed companies from 2022, with which the “accounting police” DPR – perceived as toothless – was previously charged. Including the staff taken over from the FREP, 60 auditors and other accounting experts will work in the area.
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