Monetary policy – new BaFin boss: the Swiss should clean up the German authorities

The German Finance Minister Olaf Scholz (SPD) has found a successor to the BaFin President Felix Hufeld in Switzerland, who was overthrown in the Wirecard scandal. Scholz nominated the head of the Swiss financial market regulator Finma, Mark Branson, as the new president of the German financial regulator BaFin, as the Ministry of Finance announced on Monday. The 52-year-old will take up his new office in the middle of the year.

Branson’s task will be to reorganize BaFin after the multi-billion Wirecard balance sheet scandal and make it more effective. “With him at the helm, we want to continue the BaFin reform so that the financial supervisory authority gets more bite,” said Scholz. Critics accuse the BaFin of having recognized the alleged billion dollar fraud at the payment service provider too late. At the end of January, Scholz pulled the ripcord and dismissed BaFin boss Felix Hufeld after standing behind him for months. Wirecard went bankrupt in June 2020 after uncovering a 1.9 billion euro hole in the balance sheet. It’s one of the biggest financial scandals in the post-war period.

Previously at UBS for 12 years

Branson has headed Swiss financial supervision since 2014, which he joined in 2010. When he first started at Finma, critics accused him of being too close to the banks. After all, he worked for the major Swiss bank UBS from 1997 to 2009 and previously also for Credit Suisse. But Branson took action against UBS and other banks during his tenure, so these concerns quickly faded into the background. Branson, who studied mathematics and management at the elite University of Cambridge and holds both British and Swiss citizenship, enjoyed broader support from banks and insurers than his predecessor.

The German Green politician Danyal Bayaz welcomed the proposal. “Mark Branson is a very promising personnel proposal, also because he has important international capital market experience,” said Bayaz. His expertise in the regulation of the digital financial center also gave reason to hope. “He now has the big task of regaining trust in the financial supervisory authority after the Wirecard disaster and initiating the cultural change in Bafin.” Gerhard Schick, board member of the Finanzwende interest group, emphasized that Branson, as head of BaFin, was facing a mammoth task. “He has to transform the often sleeping giant BaFin into a strong guardian over the financial markets.”

Swiss supervision is not considered particularly strict “

Left-wing finance politician Fabio De Masi also referred to Branson’s international experience. “However, Swiss supervision is not considered particularly strict,” criticized the left-wing politician on Twitter. Compared to other supervisory authorities, Finma acts discreetly and cautiously. For example, it is not allowed to impose any fines, but only to reclaim profits from illegal activities.

The investor Fraser Perring, who had uncovered misconduct at Wirecard and was then targeted by BaFin, called for a more far-reaching restructuring of the financial supervision than just a new appointment to the head of the office. “It’s cultural protectionism and it’s deeply ingrained,” Perring said. He put a question mark behind Germany’s willingness to really tackle this.

Jan Blöchliger will take over the operational management of the Swiss financial regulator Finma on May 1, 2021. The board of directors has already initiated the process for the election of the new director, the authority said. (apa, reuters)

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