MADRID (AFP)--Banks and financial authorities across Europe scrambled Sunday to uncover the scope of losses suffered at the hands of New York investment broker Bernard Madoff.
Madoff is alleged to have lost $50 billion in a giant pyramid scheme that collapsed in the global financial crisis and top European banks are reported to be clients.
Italy's stock market watchdog, the Consob, has launched an investigation into the impact of the scandal on the national financial system, Ansa news agency reported.
A spokeswoman for Royal Bank of Scotland (RBS) told AFP that the bank had "some exposure" to Madoff's company, but declined to give details.
A U.K. investment fund that also acknowledged being a Madoff client criticized what it called the "systemic failure" of U.S. regulators.
Bramdean Alternatives Limited (BRAL.LN) said the accusations against Madoff raised "fundamental questions" about the U.S. financial regulatory system.
"It is astonishing that this apparent fraud seems to have been continuing for so long, possibly for decades, while investors have continued to invest more money into the Madoff funds in good faith," the firm said in a statement.
Bramdean Alternatives invested around GBP21 million ($31.2 million), or around 9.5% of its portfolio, with Madoff's company.
U.K. newspapers reported that among Bramdean's clients is property magnate Vincent Tchenguiz, one of the U.K.'s richest men, who apparently invested GBP40 million with the firm.
European media have said Banco Santander (STD) of Spain, BNP Paribas (13110.FR) of France, HSBC Holdings (HBC) of the U.K. and Union Bancaire Privee of Switzerland could all have suffered. None has admitted or denied losing money.
Swiss bankers face losses of up to $5 billion (EUR3.7 billion), Geneva's Le Temps newspaper said.
It said Union Bancaire Privee, a major asset management institution specializing in hedge funds, could be exposed to the tune of one billion dollars.
UBP refused to comment on the report, which said that 90% of fund management companies operating in Geneva invested in products of Bernard L. Madoff Investment Securities LLC.
The Bank of Spain also opened an investigation to determine the level of involvement of Spanish companies, the Spanish daily El Mundo said.
The only official statement has come from Spain's second largest bank, BBVA, which said it had not commercialized "any Madoff product."
Spanish newspapers reported that Optimal, an investment firm of Banco Santander (STD), was heavily exposed and that investors risked losing some $3 billion. Santander, Europe's second largest bank, has made no comment.
Spanish authorities are taking the scandal very seriously and the central bank began an investigation on the impact on Friday, El Mundo said.
If the figures are confirmed, the fraud could have a bigger impact in Spain than the collapse of U.S. bank Lehman Brothers this year, in which Spanish investors had exposure of between EUR1.3 billion and EUR2.6 billion.
Europe's largest bank, HSBC, meanwhile, declined to confirm any relationship with the alleged fraudster. BNP Paribas also refused to comment on reports that it had invested with Madoff.
Madoff was arrested on Thursday for allegedly defrauding his customers through a giant pyramid scheme, with prosecutors alleging that the 70-year-old, a Wall Street veteran, confessed to losing at least $50 billion.
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Publié le 14 Décembre 2008 Copyright © 2008 Dowjones