Germany’s finance minister has pushed out Felix Hufeld, head of the country’s financial watchdog BaFin, over his handling of the Wirecard scandal, the worst accounting fraud in the country’s postwar history.
In a statement, Olaf Scholz said the Wirecard affair had revealed that Germany’s system of financial regulation “needs to be reorganised, so that it can fulfil its supervisory role more effectively”. The government did not immediately name a successor for the 59-year-old, who had run BaFin since 2015.
Mr Hufeld’s deputy Elisabeth Roegele, who is in charge of financial markets supervision, will stay in her role.
BaFin has been under fire for ignoring early warnings about fraud at Wirecard, and targeting journalists and short sellers who pointed out misconduct at the payments processor.
In February 2019, the watchdog filed a criminal complaint against two Financial Times journalists, triggering an investigation that was only dropped months after Wirecard’s insolvency last year.
Mr Scholz said he and Mr Hufeld had discussed the situation on Friday and reached a mutual decision “that, alongside organisational changes there should also be a change at the top of BaFin”.
The FT revealed earlier this week that Mr Hufeld had suggested Wirecard might be the victim of an elaborate plot by short sellers, even after it discovered that €1.9bn of its stated cash was missing.
Mr Hufeld’s departure comes one day after BaFin disclosed that it filed a criminal complaint against an employee for insider trading with Wirecard shares last June. The FT on Friday also reported that the authorities’ decision in 2019 to ban the shorting of Wirecard shares was based on flimsy oral evidence provided by Wirecard.
Mr Scholz thanked Mr Hufeld for his “great commitment” as the head of BaFin over the past eight years. He had “played a decisive role in shaping and significantly advancing the supervision of financial services in Germany and Europe during that time”.
But the planned reform of BaFin could only succeed with a “change at the top”, he said.
In a statement, Mr Hufeld expressed thanks for the “confidence that has been shown in me”.