An alliance of victims' lawyers has been pursuing claims from banks which invested clients' money with Madoff and it is said that many non-US banks have opted to make settlements.
Javier Cremades, of Spanish law firm Cremades & Calvo-Sotelo, who is co-ordinating the victims' network, explained a typical settlement is made up of the client's original investment minus the fake profits invented by Madoff.
"Client confidence is banks' most important asset," he added.
"They're facing a huge reputational problem at a time when confidence is not particularly abundant."
However, American investors with Madoff are not expected to get such returns on their losses, as many either put money with him directly or did it through feeder funds, reports the Guardian.
Earlier this month, a Bank of New York Mellon unit - Ivy Investment Management - was hit with fraud charges over allegations it had concerns about the legitimacy of Madoff's funds, but chose not to tell its clients as it did not wish to lose fee incomes.
By Asim Shah