Blog: Wirecard collapse exposed German financial flaws, Merkel admits –

Mrs Merkel’s government has already announced sweeping reforms of BaFin, the German financial regulator, which failed to investigate allegations against Wirecard for months.

Instead the regulator imposed a short-selling ban on the company to prevent speculators from betting against its stock, and leaked unsubstantiated allegations against journalists who uncovered irregularities in its Asian operations.

It has since emerged that staff at BaFin were themselves trading in Wirecard shares at the time.

Mrs Merkel’s remarks came as she testified to a parliamentary inquiry on how much she knew about concerns over the company when she lobbied the Chinese government on Wirecard’s behalf in 2019.

She said: “At that time, despite press reports, there was no reason to assume serious irregularities at Wirecard.”

At the time the Financial Times had already published allegations of serious irregularities in Wirecard’s Asian operations, but they were not taken seriously by the BaFin. 

Mrs Merkel told MPs Wirecard was one of a number of German companies she promoted on her visit to China, and that she had no reason to doubt her officials had properly vetted them.

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