February 15, 2012 / 5:04 AM / in 6 years

Canada investigating some banks as LIBOR probe widens

(Reuters) - Canada’s Competition Bureau is investigating certain financial firms as part of a widening global probe into how banks set key interbank lending rates, according to a statement from the agency.

Alexa Keating, a spokeswoman for Canada’s Competition Bureau, said in a statement late on Monday that the agency is currently investigating “alleged collusive conduct” into the setting of yen LIBOR rates.

“The Ontario Superior Court granted Section 11 orders based on evidence that there are reasonable grounds to believe that certain parties in the industry have engaged in activities contrary to the conspiracy provision of the Competition Act,” Keating said.

The Ottawa-based Competition Bureau did not name any parties in its statement.

However, in a separate report published late on Tuesday, the Wall Street Journal said the Canadian affiliates of HSBC Holdings PLC (HSBA.L), Royal Bank of Scotland Group PLC (RBS.L), Deutsche Bank AG (DBKGn.DE), JPMorgan Chase & Co (JPM.N) and Citigroup Inc (C.N) were targeted by the agency.

The brokerage named in the orders is ICAP Capital Markets, a unit of U.K. brokerage ICAP PLC IAP.L. The orders and related court documents were reviewed by the Wall Street Journal.

In an affidavit filed with the court to obtain the orders, the Competition Bureau said it is investigating whether the banks conspired to enhance “unreasonably the price of interest rate derivatives” from 2007 to March 2010, according to the newspaper.

A representative for HSBC Canada declined to comment to the Journal. Representatives for the other firms were not immediately available to comment, the WSJ said.

The five banks and the brokerage mentioned above could not be immediately reached for comment by Reuters outside regular Canadian business hours.

Regulators since late 2010 have been investigating banks that help set interbank lending rates known as LIBOR and TIBOR in London and Tokyo, which are used to set interest rates on hundreds of trillions of dollars of securities.

More than a dozen traders and brokers in London and Asia have been fired, suspected or put on leave as part of the probe, the Financial Times reported last week.

Keating said in the statement that the Bureau is cooperating with its international partners on this investigation and added that there is no conclusion of wrongdoing at this time and no charges have been framed.

Reporting by Sakthi Prasad; additional reporting by Sruthi Ramakrishnan; Editing by Kim Coghill

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