Top banks face billions in global losses from Madoff scandal*

LONDON (AFP) - - Top banks in Europe and Asia revealed on Monday they
could lose billions of dollars in a massive alleged pyramid investment
fraud scam run by Wall Street figurehead Bernard Madoff.

British, Japanese, South Korean, French and Spanish banks were among the
worst affected, with Royal Bank of Scotland saying it could lose about
400 million pounds (450 million euros, 600 million US dollars) as a
result of the scam.

Shares in Spain's Santander bank plunged some five percent in early
trading on Monday after the lender said that one of its funds had
exposure of more than three billion dollars to the scandal-hit firm
Madoff Investment Securities.

French Natixis bank, already brought low by subprime losses, put its
maxiumum potential exposure at 450 million euros.

Japanese financial giant Nomura said it could lose up to 303 million
dollars and officials said South Korean financial institutions including
an insurer and six asset management firms had a total exposure of 95.1
million dollars.

Madoff, a 70-year-old Wall Street veteran who was arrested on Thursday,
is alleged by US prosecutors to have confessed to defrauding investors
of 50 billion dollars in a long-running scam that collapsed as a result
of the financial crisis.

The Securities and Exchange Commission in Washington alleges that Madoff
delivered consistently strong returns by secretly using the principal
from new investors to pay out to other investors in the scheme, a
version of what is known as "pyramid fraud".

The scheme apparently worked as long as he could attract new investors
but seems to have unravelled when some of Madoff's clients asked to
withdraw their principal -- only to discover that his seemingly brimming
coffers were empty.

British investment fund Bramdean Alternatives Limited, which had put
around 31.2 million dollars in Madoff's company, said in a statement
that the scandal raised "fundamental questions" about the American
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.

Britain-based hedge fund manager Man Group said it had invested 360
million dollars in Madoff Securities. The fund said in a statement that
"it appears that a systematic and comprehensive fraud may have been
committed."

Meanwhile Britain's HSBC declined to comment on a report in the
Financial Times that it had potential exposure of 1.5 billion dollars. A
spokesman for HSBC in Hong Kong said he had "no comment" to make on the
report.

Spain's El Pais newspaper reported that the country's second-biggest
bank, BBVA, could lose hundreds of millions of euros in the scam. The
report said "some managers put the figure at around 500 million."

French investment bank Natixis said it could lose up to 450 million
euros after retail banking giant BNP Paribas earlier said it had risk
exposure trough funds of hedge funds that could lead to a loss of up to
350 million euros.

Italy's biggest bank, UniCredit, said on Monday that its exposure was
around 75 million euros but added that an investment unit Pioneer
Investments may also have been indirectly affected without giving any
further details.

In Switzerland, Geneva private banks could lose up to five billion
dollars (3.7 billion euros) in the scam, Swiss newspaper Le Temps
reported. The Union Bancaire Privee alone "risks losing at least a
billion," the report said.

UBP declined to comment on the report. Swiss investment bank UBS
meanwhile said its exposure in the scam was "limited and insignificant"
while Credit Suisse said it had no "material" exposure.