11/11/2013 06:04 GMT | Updated 11/11/2013 06:08 GMT

Banks Could Block Traders From Online Chat Rooms


Big banks like the Royal Bank of Scotland, Barclays and JP Morgan could ban their traders from online chat rooms in order to limit any risk of collusion or market manipulation by better policing their electronic communications.

Credit Suisse and UBS are also reviewing the use of chat-rooms, which traders use to communicate with each other and with clients, the Wall Street Journal reported.

The banks have launched reviews into how their employees use electronic communication after a series of probes by regulators into the rigging of the Libor interbank lending rate and allegations of manipulating other markets.

In September, regulators revealed messages between ICAP brokers and traders in a probe into Libor-rigging allegations that suggested brokers were being offered bribes of champagne, Ferraris and curries.

Last April, RBS handed over to the regulator messages from its traders who called themselves "The Cartel" and "The Bandits' Club" on chatrooms.

The latest investigation into alleged manipulation of the £3-trillion-a-day global currency markets comes after Barclays paid £290 million in fines to US and UK regulators in June last year over the manipulation of Libor and Euribor interbank rates, in a scandal that claimed the scalp of chief executive Bob Diamond

The Financial Conduct Authority's inquiry, joining investigations by Hong Kong and Swiss regulators, could take months to conclude and has the potential to be as big as the Libor fixing investigation.

The FCA warned that banks and traders could face fines and bans if misconduct is found, after previously fining Barclays, RBS, UBS and money broker ICAP for Libor rigging.

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