Thread by @DanielaGabor

Wirecard scandal meets Romania privatised pension system in another absurd financial capitalism story:

1. Following pressure from World Bank & others pushing privatising of pensions in Eastern Europe, Romania creates Pillar2 pensions.

2. Romanian state redirects around 1bn Euro a year from gross wages (3.75% of monthly gross wage) to Pillar2 private pension managers, mostly Western European-owned.

Mandatory contribution, so a nice subsidy to the PillarII funds. Without performance criteria, of course.

3. The largest beneficiary of the generosity of the Romanian state is Dutch-owned NN Pensions, managing about EUR5 bn PillarII assets in Romania.

4. As @FinancialTimes uncovers irregularities at Wirecard throughout 2018 and 2019, NN Pensions Romania continues to buy Wirecard shares - increasing its holding from 147.000 in mid 2019 to 252.000 by end of 2019.

By then, Wirecard largest foreign exposure of NN Pensions Romania

5. Romanian financial media, more inclined to investigative journalism after governor of Romanian central bank unmasked as collaborator of Ceausescu-era KGB, starts asking questions:

why Wirecard when you can get higher returns on Romanian capital markets?

6. Are supervisors sleeping at the wheel? Isnt it about time to put some performance criteria on Pillar II pension funds, since we're subsidising them?

7. One potential obstacle to reform: Cristian Popa, the head of investments at NN Pensions that was responsible for the Wirecard portfolio, left NN Pensions in October 2019 to join the Governing Board of the Romanian Central Bank.

revolving door, a necessary ingredient.

one for @FTAlphaville @izakaminska collection of Wirecard wild stories.