The Competition Bureau says it is discontinuing its probe into whether certain banks were rigging the interest-rate measure known as Libor, one of several investigations worldwide targeting the world's biggest banks.
Canada's competition watchdog announced Friday that it was halting its probe into "alleged collusive conduct" and suspected manipulation of the Yen London interbank offered rate (Libor) used by banks to price interest-rate derivatives, complex financial products based on interest rates.
In a statement, the regulator said it had conducted an "exhaustive review" of evidence it obtained during the probe to determine whether the criminal conspiracy provision in that Competition Act – as it was worded before amendments in 2010 – had been violated.
"The investigation is being discontinued because the evidence collected was insufficient to justify prosecution under the former criminal conspiracy provision," the bureau said, adding that the provision "required proof of significant anti-competitive economic effects."
The move comes just a month after the European Union announced $2.3-billion (U.S.) in fines for a group of banks for allegedly rigging the similar benchmark interest rate known as Euribor. Other investigations in the U.S. and Europe remain ongoing.
The Competition Bureau's climbdown also comes after it clashed during its Libor investigation with Royal Bank of Scotland Group PLC, which at first challenged demands by the bureau to hand over documents but then relented last May.
In its statement Friday, the bureau said its probe began in early 2011, when it used court orders to obtain evidence from "numerous parties."
The bureau said it co-ordinated its investigation with other enforcement agencies in "numerous jurisdictions."
Its statement also adds: "Competition laws differ across jurisdictions. Conduct that does not constitute an offence in Canada may constitute an offence in other jurisdictions."