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Madoff pyramid scandal poses huge losses for worldwide banks

Video by FRANCE 24

Latest update : 2008-12-15

Casualties in a scandal involving New York broker Bernard Madoff include Spain's bank Santander, with potential losses of up to €2.3 billion; France's BNP Paribas, €350 million; Natixis, €450 million; and banks in Japan and Switzerland.

Click here to read our Business Editor's blog: How did Madoff pull off a $50bn fraud?

 

Watch our Web News show to find out what bloggers make of the Madoff fraud.

 

AFP - French investment bank Natixis said on Monday it stands to lose up to 450 million euros (605 million dollars) in the scandal surrounding New York investment manager Bernard Madoff.
  
"Natixis might have indirectly fallen victim to the fraud for which Bernard Madoff, well known New York financier, was arrested," the subsidiary of French banks Caisse d'Epargne and Banque Populaire said in a statement.
  
"The bank has no direct exposure and it estimates its maximum net indirect exposure to approximately 450 million euros," it said.
  
Madoff, a 70-year-old Wall Street veteran who was arrested on Thursday, is alleged to have confessed to defrauding investors of 50 billion dollars in a giant pyramid scheme that collapsed in the global financial crisis.
  
Natixis said the scale of its losses "will depend both on the recovery level of the assets deposited on behalf of Natixis and the outcome of the courses of action the bank can revert to, including legal actions."
  
The bank's exposure is the highest declared by a French financial firm, although retail banking giant BNP Paribas has also said it stands to lose up to 350 million euros in the scandal.
  
French bank Societe Generale issued a statement valuing its exposure to the scandal as "negligible, below 10 million euros."
  
Natixis said it had made no proprietary investments in hedge funds managed by Madoff's investment firm.
  
But it said it "carried out operations for its clients in several world renowned funds where the securities were entrusted to first class custodians, most of which are subsidiaries of major international banks.
  
"These custodians in turn entrusted the custody of these securities to Bernard L. Madoff Investment Securities LLC."

   
 

Date created : 2008-12-15

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