In the financial world Chinese barrier is used as metaphor for practice to separate departments of an enterprise, which are led of different objectives, so that it comes to no information exchange, and thus interest conflicts to be avoided.

The term was coined/shaped in the USA after the collapse of the stock market of 1929. The US Government saw the necessity to establish a separation or an information barrier between investment bankers and issuing transaction. The goal consisted of limiting the clash of interest between an objective evaluation of enterprises and the desire accompanying it with a stock exchange course.

The term leans thereby against the Chinese wall as symbol for size and strength and its ability to separate two sides effectively.

Ironically both the history of the Chinese wall and the practice of the concept of Chinese of barrier are full from examples, in which this separation not functioned or at least did not achieve their goal. In Germany this was last in the years 2001 and 2002 the case, when repeated it turned out that enterprises, which had gone with shining evaluations through the analysis departments of the banks to the new market and so that the banks over their issuing departments too just as shining proceeds from the business had help the company of stock exchange courses, already short time later than inferior emerged. In the public the impression remained that analyses had partly consciously too rosy failed, in order to increase the yields of the own business.

Articles in category "Chinese barrier (financial world)"

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