Madoff fraud hits world’s banks

The extent of the world's largest fraud case became clear yesterday when banks and wealthy investors around the globe announced probable losses of $19.5bn. British banks' exposure to the fraud by Bernard Madoff, which the legendary Wall Street trader has admitted could go as high as $50bn, is so far close to £1.4bn.

The genial 70-year-old who was arrested and charged last week with the alleged fraud has left a global trail of victims. They include some of the world's biggest banks - already stricken in the wake of the global credit crisis - and individual investors who have lost their life savings.

In Britain HSBC revealed a potential exposure of almost £670m, while the Royal Bank of Scotland and the UK-listed hedge fund the Man Group have announced a combined potential exposure to the alleged fraud of £640m.

Madoff, the former chairman of the Nasdaq stock market, ran a hedge fund which allegedly racked up $50bn (£33.5bn) of fraudulent losses.