MELBOURNE, Australia--Australia's biggest bank has restricted
the use of Internet chat rooms by its staff as regulators globally
boost scrutiny of electronic communications that could be used to
manipulate markets.
Commonwealth Bank of Australia, the nation's largest by market
value, said it had followed lenders in other countries by
introducing measures to limit access to chat rooms, which traders
at different banks sometimes use to communicate with each
other.
Commonwealth Bank's main rivals in Australia are also
considering restricting access to so-called multibank chat
rooms--or at least discouraging their use. Elsewhere, Goldman Sachs
Group Inc., Citigroup Inc., Deutsche Bank AG and several other
investment banks have banned staff from accessing some of them.
The crackdown comes as regulators step up surveillance in an
effort to detect potential interest-rate rigging and other types of
market manipulation through the use of electronic communications
and other means. Scrutiny of such activities worldwide has
intensified since 2008, when regulators began probing suspected
rigging of the London interbank offered rate, or Libor.
Investigations into other financial markets, triggered by the
Libor scandal, are less advanced. The U.K.'s Financial Conduct
Authority began probing currency trading last April in an
investigation that has since expanded to include the practices of
traders in the U.S., Switzerland and elsewhere.
In addition, several regulators have asked banks in their
jurisdictions to search through thousands of messages between
traders for any evidence of collusion. Last month, The Wall Street
Journal reported that some banks had discovered chat room
transcripts showing traders from different institutions working
together to move markets in their favor.
Australia entered the spotlight earlier this week when the
country's securities regulator censured BNP Paribas SA after the
French lender admitted that some of its staff based elsewhere had
sought to influence the country's daily benchmark interbank lending
rate.
An internal audit by the bank found no evidence that its
Australian employees were influenced, nor of collusion with any
another bank, and BNP Paribas has agreed with the Australian
Securities and Investments Commission to tighten its controls to
prevent future attempts at market manipulation.
ASIC said it regularly monitors chat rooms and social media for
evidence of misconduct.
Australia & New Zealand Banking Group Ltd. said it was
considering restricting the use of multibank chat rooms too, but
had yet to make a final decision. National Australia Bank Ltd. said
its traders no longer participated in such chat rooms, despite
there being no official policy forbidding them from doing so.
Westpac Banking Corp. and investment bank Macquarie Group Ltd.
declined to comment. The Australian Bankers Association, an
industry group, said policies on chat rooms were a matter for
individual banks.
Write to Robb M. Stewart at robb.stewart@wsj.com
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