Our Policy Fellow explains why reform at the EU level would have been a crucial opportunity to strengthen the Capital Markets Union, and why the German government should act now.
In response to the Wirecard scandal in 2020, the EU announced far-reaching reforms of auditors to strengthen the Capital Markets Union. However, although the problems of the auditing market dominated by the "Big Four" Deloitte, EY, KPMG and PwC are well known, the Commission said in early 2023 that no steps would be taken before the next EU election.
"Now that the Commission has blown off reforms at the EU level, attention is turning to the German government," writes Sebastian Mack in the Op-Ed published on 1 March.
In its coalition agreement, the German government had promised to strengthen the independence of auditing and to address the excessive market concentration, Mack says. Furthermore, the importance of auditors will increase in the future, as the EU's sustainability reporting obligation is gradually being expanded and these reports will also have to be audited.
"If the German government wants to prevent the Big Four oligopoly from being further consolidated, it must now itself initiate reforms," argues Mack.
The entire op-ed in Focus Money Edition 10/2023 can be accessed here (in German).