According to the Independent, Santander - which owns the UK's Abbey - has over $3 billion worth of clients' money invested with Mr Madoff's firms, while the Japanese investment bank Nomura said its exposure is "limited to 27.5 billion yen", or around $303 million.
Mr Madoff was arrested last week by US regulators on charges of running an "epic" Ponzi scheme where he used existing investors' money to pay returns to other clients. The 70-year-old was previously one of Wall Street's most prominent brokers, having set up his advisory firm in 1960.
Among those with exposure to the alleged fraud, there is widespread shock. In a statement, Brandeam Asset Management - whose investments with Mr Madoff's firm account for around 9.5 per cent of its Brandeam Alternatives portfolio - said if the charges are true, the scale of the fraud is "astonishing".
The firm added that the accusations point to a "systematic failure of the regulatory and securities markets regime in the US".