"An internal 'wall' between two departments of a bank of other financial institution which is meant to ensure that conflict of interest do not arise and, in particular, there there is no inside dealing in the shares of a client.

For instance, a bank might have a corporate finance department which advises on takeovers and mergers, and a fund management division which invests client money in shares. If the fund managers were to hear in the canteen about an impending deal, that would be insider dealing. Chinese walls, 'enforced by a bank's compliance department, are meant to ensure that the corporate financiers don't talk to the fund managers about their work."

taken from Finance-glossary.com

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