On the day it was fined EUR725 million by the EU for rate rigging, Deutsche Bank has confirmed that it has banned traders from using chat rooms, which have proved a fruitful hunting ground for regulators sniffing out market manipulation.
The German giant confirmed to Reuters that it stopped multi-party chatrooms for foreign exchange staff in the first quarter and extended the ban to other parts of the fixed income business this week. Last week UBS sent a memo to traders telling them to stop using chat rooms, while Barclays, RBS and Citigroup are all also reported to have taken similar steps in recent months.
Logs of chats between traders on Bloomberg terminals and Thomson Reuters desktops have formed a central plank of investigations into the Libor fixing scandal and the latest allegations of foreign exchange rates manipulation.
Today the EU fined a group of six banks a record EUR1.7 billion for participating in cartels to rig global interest rate benchmarks. Deutsche Bank took the biggest hit, fined a total of EUR725 million, while Societe Generale will pay EUR446 million, RBS EUR391 million, and JPMorgan Chase EUR80 million. Barclays and UBS escaped massive fines because they blew the whistle on the cartel.
Joaquín Almunia, Commission VP in charge of competition policy, says: "What is shocking about the Libor and Euribor scandals is not only the manipulation of benchmarks, which is being tackled by financial regulators worldwide, but also the collusion between banks who are supposed to be competing with each other."