The news came towards the end of June and today, 15 July, ESMA announced a "fast track" assessment of BaFin and the Financial Reporting Enforcement Panel (FREP) in its supervision of Wirecard AG in the run-up to Wirecard's collapse.

The announcement by ESMA was uncharacteristically brutal and blunt: "[t]he peer review tool has been chosen as the [Transparency Directive] only contains high level principles regarding financial reporting and its supervision, and the IAS Regulation is not included in the list of acts for which ESMA may launch a Breach of Union Law investigation"; while ESMA also takes the unusual step of disclosing previously confidential parts of its reviews of member states' steps taken "to promote consistent application and supervision of IFRS". This found that BaFin and FREP had areas for improvement in their enforcement model.

In other words, ESMA is tasked with deciding whether there are fundamental breaches of EU law by a member state and its organs and throwing the book at them if there were.

The assessment is due to be delivered by ESMA in October this year. One can imagine the atmosphere at BaFin today and the fingers being crossed across all other EU institutions that the assessment by ESMA will not find them at fault even in passing.

Which is ironic, given that it was only in February 2019 that ESMA supported BaFin's banning of short selling of Wirecard AG shares due to "the existence of specific adverse situations or circumstances that constitute a serious threat to market confidence in appropriate price determination in Germany." ESMA seemed as convinced at that time as BaFin that short-sellers of Wirecard were intent on destabilizing German markets for personal gain rather than intent on highlighting the failures of Wirecard.

So perhaps there are staff at ESMA who also should be holding their breath and keeping their fingers crossed.