Browse Definitions:
Definition

Chinese wall

A Chinese wall is a barrier that separates two or more groups, usually as a means of restricting the flow of information. Typically, the wall is purely conceptual, although groups may be divided by physical barriers (areas of a building, for example) as well as policies. The concept of the Chinese wall is employed in a wide variety of environments, including the financial industry, business, software development, project management, network security, law, and journalism.

The term Chinese wall is said to have originated after the catastrophic stock market crash of 1929, when the largely unregulated United States market suffered a 40% drop between September and October. According to one theory, the crash resulted from inflated stock values created by price manipulation and insider trading. After the crash, Congress passed a law mandating the separation of commercial and investment banks, in an attempt to prevent conflict of interest. Rather than enforcing physical or corporate separation, however, the law only mandated that policies must be in place to create a logical division between these segments.

In theory, a Chinese wall serves to restrict information to those individuals or groups that need it to conduct their jobs. In practice, however, Chinese walls are far from infallible because they rely on the honor system: the information is only restricted by the discretion and meticulousness of the parties involved. Regulations that specify legal requirements for information security tend to improve compliance in this regard.

Here's one example of a Chinese wall: In software development, the Chinese wall (sometimes referred to as the clean room technique ) is a reverse-engineering method in which programmers working on code are separated into two groups. The first group translates a program's machine code back into source code and document s the process, but writes no new code. The second group doesn't refer to the original code, but creates a new program from the first group's documentation. The purpose of this exercise is to ensure that the new program's code cannot be said to be derived from the code of the original program.

Chinese wall is usually said to be a reference to the Great Wall of China, erected over 2000 years ago to protect inhabitants from invaders. However, other theories exist. In a Wikipedia entry, for example, the author argues that the term probably derives from a diplomatic contrivance of the Late Imperial period in China: "...if a junior mandarin saw a senior mandarin on the road he was expected to bow and present his compliments. In Beijing this tended to happen quite a lot and so traffic was frequently blocked. Instead mandarins came up with a method of pretending they did not see each other on the road by the clever placing of a retainer with an umbrella. Because they did not "see" each other, they were not obliged to stop."

The term "Chinese wall," because it refers to a race of people, may be potentially offensive. For that reason, the term "ethical wall" is sometimes used instead. 

This was last updated in July 2013

Continue Reading About Chinese wall

Start the conversation

Send me notifications when other members comment.

By submitting you agree to receive email from TechTarget and its partners. If you reside outside of the United States, you consent to having your personal data transferred to and processed in the United States. Privacy

Please create a username to comment.

-ADS BY GOOGLE

File Extensions and File Formats

Powered by:

SearchCompliance

  • cyborg anthropologist

    A cyborg anthropologist is an individual who studies the interaction between humans and technology, observing how technology can ...

  • RegTech

    RegTech, or regulatory technology, is a term used to describe technology that is used to help streamline the process of ...

  • conduct risk

    Conduct risk is the prospect of financial loss to an organization that is caused by the actions of an organization's ...

SearchSecurity

  • security

    Security, in information technology (IT), is the defense of digital information and IT assets against internal and external, ...

  • insider threat

    An insider threat is a malicious hacker (also called a cracker or a black hat) who is an employee or officer of a business, ...

  • virus (computer virus)

    A computer virus is malicious code that replicates by copying itself to another program, computer boot sector or document.

SearchHealthIT

  • HIPAA Privacy Rule

    The Standards for Privacy of Individually Identifiable Health Information, commonly known as the HIPAA Privacy Rule, establishes ...

  • HIPAA business associate agreement (BAA)

    Under the U.S. Health Insurance Portability and Accountability Act of 1996, a HIPAA business associate agreement (BAA) is a ...

  • telemedicine

    Telemedicine is the remote delivery of healthcare services, such as health assessments or consultations, over the ...

SearchDisasterRecovery

  • data recovery

    Data recovery restores data that has been lost, accidentally deleted, corrupted or made inaccessible. Learn how data recovery ...

  • disaster recovery plan (DRP)

    A company's disaster recovery policy is enhanced with a documented DR plan that formulates strategies, and outlines preparation ...

  • fault-tolerant

    Systems with integrated fault tolerance are designed to withstand multiple hardware failures to ensure continuous availability.

SearchSolidStateStorage

  • flash file system

    Flash file systems are designed specifically for memory devices. A well-designed flash device and flash file system ensure ...

  • IOPS (input/output operations per second)

    IOPS measures the maximum number of reads and writes to non-contiguous storage. It is not an actual benchmark since vendor ...

  • eMMC (embedded MultiMediaCard)

    An embedded MultiMediaCard (eMMC) is a small storage device made up of NAND flash memory and a simple storage controller.

SearchCloudStorage

  • RESTful API

    A RESTful application program interface breaks down a transaction to create a series of small modules, each of which addresses an...

  • cloud storage infrastructure

    Cloud storage infrastructure is the hardware and software framework that supports the computing requirements of a private or ...

  • Zadara VPSA and ZIOS

    Zadara Storage provides block, file or object storage with varying levels of compute and capacity through its ZIOS and VPSA ...

Close