Canada’s Competition Bureau has launched an investigation into possible manipulation of the derivatives market by five of the world’s largest banks, multiple news sources confirm.

Competition Bureau spokeswoman Alexa Keating confirmed to Reuters that the agency is investigating "alleged collusive conduct" by the banks that may have manipulated the LIBOR rate for the Japanese yen.

The LIBOR, or London Interbank Offered Rate, is a widely-used measure of interest rates that is published by England’s banking association every day. It provides benchmark interest rates for loans in a variety of currencies, including the Japanese yen, and is used for various types of lending, including student and corporate loans.

Manipulation of LIBOR-linked derivatives may have affected the LIBOR rates, changing the borrowing costs for individuals and organizations around the world.

Though the Competition Bureau has not publicly stated which banks are being probed, documents obtained by Bloomberg News show the banks in question are Citigroup, Deutsche Bank, HSBC, JPMorgan and Royal Bank of Scotland.

Two brokerages -- ICAP Capital Markets and RP Martin Holdings -- have also been linked to the investigation.

According to the Wall Street Journal, the banks allegedly manipulated derivative markets over a three-year period, from 2007 to 2010 -- before, during and after the financial crisis.

A “cooperating party” in the investigation reportedly told the Competition Bureau that “the banks’ employees agreed to make artificially high or low submissions for Yen Libor to improve the outcomes of trades tied to the rate. According to the documents, banks communicated with one another and with cash brokers to form agreements,” Bloomberg reported.

The Wall Street Journal reports the “cooperating party” is another bank, which has so far not been named.

Regulators around the world have been grappling with the issue of market manipulation since the financial crisis exposed evident wrongdoing within the global financial community.

A European Union investigation into derivatives manipulation, started last year, is investigating some of the same banks as the Canadian probe, including HSBC and RBS. That probe came after a New York Times expose reported on efforts by several major banks, including Goldman Sachs, JPMorgan and Morgan Stanley, to control access to the derivatives market.

In the U.S., California has been probing since 2009 the possibility it was overcharged in the derivatives market, potentially making its deficit crisis worse.

The Canadian Competition Bureau has not determined any wrongdoing in the case so far, Keating told the Journal.

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