UBS is the latest bank to consider banning chatrooms

Nov. 27 (UPI) -- Regulatory probes have banks considering banning and cracking down on chat room communications left and right. UBS is the latest to do so, following JPMorgan, Citibank, RBS and Barclays.

Banks have been recently discussing banning traders from an instant messaging service provided primarily by Bloomberg, allowing traders to communicate to buy and sell assets such as stocks, bonds, currencies and commodities. It also helps them link more efficiently to clients and other banks.

Scandals unwound from probing chat room communications include currency-market manipulations and the five-year Libor investigation, in which a series of banks manipulated interbank interest rates. Traders were found to be joking around in chats amid Libor manipulation, and banks like Barclays faced humiliation and monetary damages when these chats were found and published.

UBS now is having a third party moderate interactions within chat rooms. JPMorgan, the biggest U.S. bank by assets, is internally investigating how the communications will impact the bank, and how to better regulate as well as facilitate trader interactions. The investigation will run into early 2014.

UBS, which is a Swiss bank, makes this decision after the Swiss Financial Market Supervisory Authority has announced earlier that it would probe foreign exchange market manipulations among banks.

[Wall Street Journal] [The Telegraph] [Wall Street Journal] [IB Times] [Bloomberg]