On Wednesday 2 December, Steven Maijoor, the Chair of the European Securities and Markets Authority (ESMA), presented his peer review on the Wirecard scandal to the European Parliament Committee on Economic and Monetary Affairs (ECON), in which he concludes that there was a series of “failures, inefficiencies and legal and procedural obstacles” in supervision by the German authorities (see EUROPE 12594/5).
Maijoor said that ESMA, which does not have direct supervisory powers with regard to financial information, focused on the extent to which BaFin, the German regulator, and the German Financial Reporting Enforcement Panel (FREP) enforced ESMA’s 2014 Guidelines on Enforcement of Financial Information (GLEFI).
“We have looked at one country and one specific case. (...) This means we should be careful in broadening these findings to draw overall conclusions either at the national level or at the European level”, he said.
Nevertheless, he said, ESMA’s Board of Supervisors will consider whether some of the recommendations put forward in the report would help improve the overall effectiveness of supervision and whether it should propose that they are incorporated into European legislation. ESMA will announce its views on these issues in January.
A lot of MEPs believe that the lesson that the EU can take from the scandal is the need for a single European capital markets supervisor to be put in place. This was also one of the conclusions from a recent report carried out for the ECON Committee on the implications of the Wirecard scandal (see EUROPE 12597/17).
Maijoor replied to a question from Luis Garicano (Renew Europe, Spain), who asked whether there actually was an “antidote to economic nationalism in supervision”, by stating that there are two instruments: direct supervision and reinforcing convergence.
Sven Giegold MEP (Greens/EFA, Germany), praised ESMA’s courage in criticising BaFin’s lack of independence from the German government and felt that it was time to examine this issue for all of the EU’s national supervisors.
Several MEPs, including Eero Heinäluoma (S&D, Finland), also asked Maijoor about reforming the audit sector to avoid conflicts of interest and whether ESMA could carry out direct supervision in this area.
Maijoor did not want to go into much detail on the issue, and so simply noted that the auditing sector was not part of ESMA’s remit, but came under the remit of the Committee of European Auditing Oversight Bodies (CEAOB).
He nevertheless confirmed that, speaking in a personal capacity and from past experience in audit supervision, he had noticed tensions and concerns regarding conflicts of interest in some cases.
Markus Ferber (EPP, Germany) said, in a written statement published before the hearing, that this matter was simply an “idiosyncratic failure of one supervisor”, not a systematic failure of European supervision or regulation.
“Calls for a European supervisor or for audit reform are therefore not the appropriate response to the Wirecard scandal. If the national competent authorities that do the day-to-day supervision fail so miserably, a European supervisor would not fare any better”, he said. (Original version in French by Marion Fontana)