Banks consider blocking trader chat rooms

Summary:A Wall Street Journal article says that in the face of mounting regulatory scrutiny, big banks are considering blocking their employees from chat rooms that are a common tool of traders.

A story in the Wall Street Journal (subscription required) describes how big banks are considering blocking trader access to chat rooms frequented by traders. The chat rooms, which connect multiple banks and other financial companies, generally through Bloomberg terminals, are facing increasing regulatory scrutiny.

The WSJ article specifically names J.P. Morgan Chase and Credit Suisse as discussing such a block internally. It also names Royal Bank of Scotland, Barclays, UBS and Citigroup as reviewing the chats.

It's not hard to see how the chats, which link traders at competitive institutions, could be abused for personal or company profit. The story says a series of regulatory probes into market manipulation and interest-rate rigging has brought the issue to the fore. The US Department of Justice's antitrust division as well as regulators in the UK, Switzerland and Hong Kong are involved.

An earlier WSJ story described chat transcripts provided to regulators, in which traders joke about being able to influence currency exchange rates and share information with competitors inappropriately. Some banks have already suspended traders involved in it.

Bloomberg terminals are widely used in these markets, but the WSJ describes how some banks are using other systems, some internally-developed, to replace Bloomberg.

2012_Bloomberg_Terminal_by_jm3_-_Creative_Commons_licensed
A Bloomberg terminal. Image Creative Commons licensed by JM3 at http://www.flickr.com/photos/jm3/6857824615/

Topics: Security, Banking, Government, Government : UK, Government : US

About

Larry Seltzer has long been a recognized expert in technology, with a focus on mobile technology and security in recent years. He was most recently Editorial Director of BYTE, Dark Reading and Network Computing at UBM Tech. Prior to that he spent over a decade consulting and writing on technology subjects, primarily in the area of sec... Full Bio

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