(Bloomberg) -- Wirecard AG’s collapse has laid bare significant cracks in Germany’s financial oversight, increasing pressure on Chancellor Angela Merkel’s government after one of the country’s biggest corporate failures.

Even with ample warning, German authorities failed to catch accounting issues at the digital-payments company. Slow decision-making, insufficient oversight and fragmented responsibilities created cracks that allowed Wirecard’s problems to go undetected by officials.

Germany is one of relatively few countries to split accounting enforcement between a private-sector watchdog and its markets regulator, while the investigation of money laundering at non-financial companies is handled by regional authorities. With the fallout risking the country’s reputation as a place to do business, the government is now pushing for reform.

The financial regulator, known as BaFin, has come under fire for being slow to respond to allegations and temporarily banning short selling of Wirecard stock last year, an unprecedented step that appeared to back Wirecard. But the inefficient delegation of supervision duties helps explain why it failed to dig up problems at the company.

The government will cancel its contract with the accounting watchdog, called FREP, a spokesman for the Justice Ministry said on Monday. The contract is set to run another 18 months, according to Bild am Sonntag.

To consolidate financial enforcement, BaFin will be given the power to start investigations into company accounts, the Financial Times reported on Sunday.

“Self-regulation by the auditors doesn’t work properly,” Deputy Finance Minister Joerg Kukies told the FT. The ministry “will inevitably have to question whether the bodies that currently regulate the industry should continue to do so in their current form,” he said.

BaFin has come under fire for its handling of Wirecard. The regulator received documents alleging irregularities at the company in January of last year, yet it took more than a year to ask prosecutors to follow up on suspicions of market manipulation.

It asked FREP in February 2019 to investigate, and since made multiple follow-up requests, but hadn’t received a report on Wirecard’s accounting, said a spokeswoman for the regulator.

FREP assigned just one person to probe Wirecard, according to Frankfurter Allgemeine Sonntagszeitung. The organization didn’t immediately respond to a request for comment.

In the meantime, KPMG’s special audit, published in April this year, couldn’t verify much of Wirecard’s historic revenue and profits.

Once lauded as one of Germany’s fintech stars, Wirecard filed for insolvency last week after saying that 1.9 billion euros ($2.1 billion) previously reported as cash on its balance sheet probably doesn’t exist.

With traditional lenders Deutsche Bank AG and Commerzbank AG struggling with their own problems, the scandal has raised questions over how to rescue Germany’s role in modern finance after Wirecard’s demise.

“It is very important to us that the business is saved and a German company can continue to run it,” said Andreas Laemmel, the lead lawmaker for economic affairs in Merkel’s Christian Democratic causcus, told Bloomberg. “But Wirecard’s name cannot persist, it’s burned.”

©2020 Bloomberg L.P.