BERLIN: German Finance Minister Olaf Scholz said lawmakers need to quickly determine how to tighten regulation in the wake of an accounting scandal at payments company Wirecard that has tarnished the reputation of Germany's financial watchdog.

The Wirecard case "raises critical questions about supervision of the company, in particular with regards to accounting and balance sheet control," Scholz told Reuters on Tuesday.

"It appears that neither auditors nor regulators were effective here," he added.

The comments were an about-face from a brief statement he made on Monday, in which he said regulators had worked hard and done their job.

Wirecard had said on Monday that 1.9 billion euros ($2.15 billion) it had booked in its accounts likely never existed, a black hole that has led to the arrest of its chief executive and that threatens to engulf the company.

Scholz said that any mistakes made by financial watchdog Bafin in the supervision of Wirecard "now need to be identified and eliminated quickly".

"And we need to quickly determine what changes are needed to regulatory rules in order to oversee complex corporate structures comprehensively, promptly and quickly," he said.