Debate: The role of the European Supervisory Authorities in the Wirecard scandal
Date: WEDNESDAY, 7 OCTOBER 2020
Speaker: Valdis Dombrovskis
Language: EN

This is particularly true when it comes to supervision. The recent review of European supervisory authorities has improved the supervisory convergence powers of these authorities. ESMA’s fast—track peer review of the enforcement of financial information in Germany will be the first review to be conducted according to the new rules.  Thanks to the more independent and strengthened process, ESMA can where necessary issue individual recommendations towards national supervisors, following a ‘comply or explain’ mechanism. This mechanism allows a close follow—up on the recommendation and better understanding of the approach of the national supervisor. ESMA can also submit an opinion to the Commission if it considers that further harmonisation of EU rules would be needed. In a single market, the impact of national supervisory failure extends far beyond the borders of the single Member State. National as well as European supervisors need to have the right tools, skills and powers to oversee complex value chains and group structures, as well as to investigate possible cases of fraud or abuse, in particular when it comes to publicly—listed companies and auditors’ responsibilities.  This is why the Commission plans to work towards an enhanced single rulebook for capital markets by assessing the need for further harmonisation of EU rules and monitoring progress towards supervisory convergence. It will take stock of what has been achieved by the end of the next year and propose measures for stronger supervisory coordination or direct supervision by European supervisory authorities where needed. Wirecard was also offering payment processing services and other non—regulated technical services. This shows that supervision and oversight of the actors in the payment chains has become increasingly complex, taking into account the emergence of many new business models and group structures. Activities performed by unregulated entities can have an impact on many other companies in the system. This is why, as part of the review of the Payment Services Directive, the Commission will evaluate any new risks stemming from unregulated activities, especially technical services ancillary to payment or e—money services. We will assess how to best to mitigate those risks and whether some of these activities should be brought under supervision. More broadly, we need to ensure appropriate regulation and supervision of the more complex ecosystem and fragmented value chains that may emerge from the increased involvement of technology companies in the provision of financial services.  As regards auditors, the Commission will publish a report on the functioning of the EU audit market. Separately, the Commission also launched an assessment on how current EU audit market rules work. These were planned before Wirecard’s collapse, but both reports will highlight issues of relevance in this case – for instance, the performance of all the committees, given the different approaches in the Member States. Honourable Members, thank you again for this debate. We look forward to continue working with you on these critical issues for the confidence of EU investors in financial markets.