UPDATE 1-JP Morgan, Deutsche ban multi-dealer chat rooms - sources

Tue Dec 17, 2013 8:02am EST
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By Jamie McGeever

LONDON Dec 17 (Reuters) - JP Morgan Chase and Deutsche Bank are banning the use of multi-dealer online chat rooms, sources familiar with the plans told Reuters, as banks crack down on inappropriate communications by staff following a string of scandals.

Chat rooms have been a focus for regulators investigating manipulation of benchmark interest rates and possible rigging in the $5.3 trillion-a-day foreign exchange market.

Chat communications also featured prominently in a five-year probe into the rigging of a key interest rate known as the London interbank offered rate, or Libor, which has already cost banks billions of dollars in settlements.

A source familiar with developments at JP Morgan, the biggest U.S. bank by assets, said the decision was unrelated to the FX probes which first surfaced in June, noting that this had been under review at the bank since even earlier this year.

"This has always been about more than FX," the source said, adding that the casual nature of online chat rooms increased the potential for "inappropriate" remarks to be made.

The ban will come into force later this week, and the use of such chat rooms among staff for social purposes will also be prohibited.

Deutsche Bank, Germany's biggest bank, will extend the ban on multilateral chat rooms already in place for its foreign exchange and fixed income staff to all its corporate banking and securities businesses, including equities.   Continued...