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Wirecard Flourished in Regulatory Blind Spot That’s Growing

  • Regulators say rules uneven between banks and fintech firms
  • MEP says weak enforcement of existing rules the bigger problem
The Wirecard AG logo sits on the company's headquarters during a raid with prosecutors in Munich, on July 1.

The Wirecard AG logo sits on the company's headquarters during a raid with prosecutors in Munich, on July 1.

Photographer: Michaela Handrek-Rehle/Bloomberg
From

Wirecard AG’s collapse displayed a growing blind spot for the guardians of the world’s financial system: how do you regulate a firm that acts like bank, but isn’t really a bank?

For years, Germany’s supposed fintech star escaped strict scrutiny because financial watchdog BaFin was focused on its banking unit rather than Wirecard as a whole. With the scandal undermining Germany’s reputation as a place to do business, the government is overhauling who regulates who, but it could also spark a regulatory rethink with consequences for the broader fintech industry.