FINANCIAL SYSTEM OF GERMANY WITH WIRECARD SCANDAL

1. FINANCIAL SYSTEM &
COMPARISON WITH INDIA
GERMANY

2. Meet the Team
ANJALI MEHRA
201012
CHETNA
201032
ADITI RAJ
201003
MAHIMA SONI
201082
KUNIKA
201074
ARUNA
201020

4. Financial system
of Germany
Aditi Raj 201003

5. Largest banking system in the
world.
German banks have assets totaling
of 300% of GDP.
Deutsch Bundesbank is the central
bank of Germany.

8. The most recent
scandal in
Germany
WIRECARD SCANDAL
kunika 201074

9. The Wirecard scandal was a series of corrupt business
practices and fraudulent financial reporting that led to the
insolvency of wirecard, a payment processor and financial
services provider, headquartered in Munich, Germany. The
company was part of the DAX index. They offered
customers electronic payment transaction and risk
management services, as well as the issuance and
processing of physical cards. The subsidiary, Wirecard Bank
AG, held a banking license and had contracts with multiple
international financial services companies.

10. RISE OF WIRECARD
The company was founded in 1999. After Markus Braun joined as CEO
in 2002, the company focused on online payment services, starting
with porn and gambling websites as clients. Wirecard entered Stock
Exchange segment , an action that has been criticised as avoidance of
proper scrutiny during an initial public offering. AG by way of a
capital increase against investment in kind, making wirecard a stock
corporation listed in Prime Standard stock market segment through a
reverse IPO. A clean audit from EY in 2007 allayed investors
concerns. Wirecard was included in the TecDAX since 2006 and in the
DAX since 2018. In 2018, Wirecard shares reached the peak.

11. Wirecard attributed its fast growth to fast international expansion
achieved through acquisition of local businesses , resulting in its
revenue growth often outpacing general industry trends. In March 2017,
wirecard acquired Citi prepaid card services and created wirecard
North America, entering the US market. Also in 2007, Wirecard
expanded into banking by purchasing XCOM Bank AG, allowing it to
issue credit and debit cards through licensing agreements with both
Visa and Mastercard. In Nov 2019, Wirecard entered the Chinese
market by acquiring Beijing based Allscore Payment Services.

12. CAUSES OF DOWNFALL
Wirecard is suspected to have engaged in a series of fraudulent
accounting activities to inflate its profit. Despite the allegations, BaFin
ultimately took little action against the company before its eventual
collapse , opting instead to file complaints against critics of the
company and short sellers of the company's stock.
Wirecard's combined banking and non-banking operations make its
financial results harder to compare with peers, so investors had to rely
on adjusted versions of the financial statements of the company. The
"adjusted" accounts, unlike the reporting adhering to International
Financing Reporting Standards, resulted in inflated earnings and cash
flow figures.

13. The Introduction of FISG
(Financial Market Integrity
Strengthening Act)
Chetna 201032

14. FISG was introduced to prevent balance sheet manipulations
It came into force on 1st July, 2021
The provisions of FISG apply exclusively to listed companies
FISG has introduced some regulations to increase the
independence of auditors

15. Role of supervisory board
Mandatory audit committee
Extended information rights and functions
for audit committee members
Appoint two financial experts

16. Legislative changes for auditors
under the FISG
Increase in auditors' liability
Strict rules about auditor rotations
Election for auditors of insurance
companies by the shareholders

17. Comparison of India's &
Germany's Financial
System
MAHIMA SONI

18. Parameters for comparisons
of the Financial System
BANKS​ STOCK
MARKET
MONETARY
POLICY
FISCAL
POLICY ​

19. Basic​ Indian Banks ​ German Banks​
Banking History ​ Since 1720 ​
(Bank of Bombay)​ Since 1590​(Berenberg Bank)​
Central Bank​ RBI​ Deutsche Bundesbank ​
Regulatory Authority ​ RBI​
The Federal Financial Supervisory
Authority (BaFin)​
Currency ​ Indian Rupees (Symbol:-₹)​ Euro (Symbol:- €)(1€=Rs 84.54)​
No. Of banks ​
Pvt bank – 21 banks
​
Public bank – 12​
Pvt bank – 200 banks
​
Public bank – 400​
Charges in deposit ​ No charges ​
Charges(€ 5 a
month) except Girokonto bank​
Total Assets ​ $82 billion (Rs 6.26 lakh crores)​ $ 6,262 billion (9.2 trillion euros)​
Foreign Exchange Reserve​ $553 billion​ $36.7 billion​
​
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ON THE BASIS OF BANKS:-

20. Basic​ India​ Germany ​
Total no. of Stock Exchange​ 23 Stock Exchanges 7 Stock Exchanges
Popular Stock Exchange ​
NSE (largest) and
BSE (oldest) ​
Frankfurter Wertpapierbörse
(largest)​
Index ​ Nifty & Sensex​ XFRA​
Regulatory Authority ​
SEBI
(The Securities &
Exchange Board of
India)​
BaFin
(The Federal
Financial Supervisory
Authority)​
Market Capitalization ​ $3,527.328 billion ​ $1,684.616 billion​
ON THE BASIS OF STOCK EXCHANGE:-

21. Managed by RBI and established in
the year 1934.
​
Main motive is to give stability to
money supply.​
Instruments include CRR, SLR, Repo
Rate, Bank rate, OMO, Marginal
Standing Facilities etc. ​
.
Implemented by the Deutsche
Bundeshbank
Main motive of euro system is to
ensure price stability
Instruments are OMO, Minimum
Reserves, Excess Reserves,
Pandemic emergency purchase
program, Transmission protection
instrument. ​
ON THE BASIS OF MONETARY POLICY:-
INDIA GERMANY

22. Basic​ India ​ Germany ​
Managed ​
Ministry of Finance formulates the
fiscal policy.​
Federal government and associated
Stability Council​
Objective​
Higher Economic Growth, Price Stability and
Reduction in Inequality​
Adopt a balanced budget contain
ing no new debt. Fiscal policy priorities are
forward-looking investment, education and
research and security​
Components​
Government Receipts, Government
Expenditure and Public Debt​
Fiscal Balance and Public Debt, Fiscal Policy
Plans, Public Investment and Expenditure
by function.​
ON THE BASIS OF FISCAL POLICY:-

23. THINGS CAN BE ADOPTED
FROM
GERMANY 'S FINANCIAL SYSTEM

24. BANKING SYSTEM OF GERMANY
Universal banking system of Germany
allows country's more than 36000 bank
offices not only to take deposits and
make loans to customers but also to
trade securities
Germany's financil system is mostly bank based
with bank loans serving as the predominent
form of funding for firms .

25. India's banking system is mainly dominated by
government owned public sector banks
(PSBs) which account for around 60% of the
commercial banking assets
Indian banks are more restrictive in nature as
compared to Germany's banks.
However, it is true that not all banks can do all
activities there are different kinds of banks for
diiferent activities
PROBLEMS
IN
MAKING
CHANGES
IN INDIAN
BANKING
SYSTEM
INDIA can not absorb such vast
change in its economy as it already
have a settled and large banking
system

26. THANKYOU