Did you think it couldn't get worse?..

Some of the world's biggest banks have revealed that they are victims of a fraud which has lost $50bn (£33bn).

Jewish Bankster Bernie Madoff has been charged with fraud in what is being described as one of the biggest-ever such cases.

Among the banks which have been affected are Britain's RBS, Spain's Santander and France's BNP Paribas.

One of the City's best-known fund managers has criticised US financial regulators for failing to detect the alleged fraud.

"This is the biggest financial scandal, probably in the history of the markets - $50bn is a huge amount of money," she said.

Among those financial institutions which have so far announced investments with Bernard Madoff:

* The Royal Bank of Scotland said on Monday it could potentially lose about £400m from the alleged fraud, if all its investments had to be written off
* Spain's largest bank, Santander, which also owns the UK High Street banks Abbey, Alliance & Leicester and Bradford & Bingley, said just one of its funds alone had $3.1bn invested in the firm run by Madoff
* France's BNP Paribas estimated its exposure to be more than $460m
* The French bank, Natixis, a subsidiary of Caisse d'Epargne and Banque Populaire, said it could potentially lose up to 450m euros (£402m; $605m)
* One of the world's biggest investment groups, Man, said it had invested about $360m through its RMF institutional fund of funds business, representing 0.5% of its total funds
* Japanese bank Nomura said its exposure was relatively small, at about 27.5bn yen (£201m), and added: "We regard this as non-material, considering our capital base."

Madoff is a trustee of the Yeshiva University and a long-time philanthropist in Jewish circles, using other peoples money. (Where have I heard that one before?)

According to Yeshiva University, "Bernard L. Madoff, a member of the University's Board of Trustees since 1996, was elected chairman of the Board of Directors of Sy Syms School of Business in 2000. Madoff is chairman of Bernard L. Madoff Investment Securities, one of the nation's largest third-market dealers in New York Stock Exchange and over-the-counter securities. A benefactor of the University, Madoff recently made a major gift to the Sy Syms School."

Madoff is alleged to have used money from new investors to pay off existing investors in the fund. A federal judge has appointed a receiver to oversee Madoffs' firm's assets and customer accounts, while the 70-year-old bankster has been released on $10m bail. Madoff founded Bernard L Madoff Investment Securities in 1960, but also ran a separate hedge fund business.

According to the US Attorney's criminal complaint filed in court, Madoff told at least three employees on Wednesday that the hedge fund business - which served up to 25 clients and had $17.1bn under management - was a fraud and had been insolvent for years.

He said he was "finished", that he had "absolutely nothing" and "it's all just one big lie", and that it was "basically, a giant Ponzi scheme", the complaint said.

Under a Ponzi scheme, which is similar to pyramid schemes, investors are promised very high returns on their investment, while in reality, early investors are paid with money collected from later investors.

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