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As the world recoiled at the size and simplicity of Bernard Madoff's fraud, banks in Europe were one by one admitting to potentially being on the hook for millions through their exposure to the Wall Street money manager's scheme.

HSBC (nyse: HBC - news - people ), Royal Bank of Scotland (nyse: RBS - news - people ) and Banco Santander are some of the most exposed lenders, in some cases having indirectly invested in Madoff's funds through hedge funds, or directly through a private banking arm. Since news of his fraud broke last Thursday, banks have been scrambling to calculate their exposure to his firm and are now waiting for receivers to provide further information on the total value of assets in Madoff's portfolio.

Unfortunately, there appears to be little hope that banks who invested in Bernard Madoff Investment Securities will see much or any of their money again. Madoff was arrested on Thursday after reportedly confessing to running a "giant Ponzi scheme" in which he lost $50.0 billion of his investors' money. His two sons contacted authorities on the evening of Dec.10 after their father admitted to the fraud. (See "Madoff's Money.")

RBS said Monday that it could lose as much as 400.0 million pounds ($599.4 million) because of "trading and collateralized lending to funds of hedge funds that invested with [Madoff's] firm," the bank said, without giving further details. British hedge fund Man Group said it had approximately $360.0 million invested in two funds that were "directly or indirectly sub-advised by Madoff Securities," representing about 0.5% of its funds under management. Reports say that HSBC could lose as much as $1.0 billion through its exposure.

Banco Santander (nyse: STD - news - people ), one of Europe's most well-regarded banks for having largely avoided investing in the American subprime mortgage market, said on Sunday that one of its investment funds had exposure of 2.3 billion euros ($3.1 billion) to Madoff Securities. Most of this was invested directly by the bank's investment fund, Optimal, on behalf of Santander's overseas institutional investors and private banking clients. Spain's Banco Bilbao Vizcaya Argentaria (nyse: BBV - news - people ) had approximately 500.0 million euros ($673.3 million) of exposure to funds run by Madoff.

Investment bank Natixis (other-otc: NTXFF - news - people ) appears to be one of the worst hit so far in France, after it said Monday that it had exposure of up to 450.0 million euros ($600.3 million), while BNP Paribas (other-otc: BNPQY - news - people ) said its clients could lose up to 350.0 million euros ($471.3 million). Societe Generale (other-otc: SCGLY - news - people ) said Monday that it had less than 10.0 million euros ($13.5 million) in exposure to Madoff. Credit Agricole (other-otc: CRARF - news - people ) was scheduled to release details of its exposure to the fraud later on Monday, but this was expected to be negligible.

The Madoff case is a clear setback for European banks that have been pining for the end of billions of dollars worth of write-downs and losses that followed the the subprime mortgage crisis. Some, like Bramdean Alternatives, run by London-based fund manager Nicola Horlick, have criticized American regulators for not catching Madoff's fraud sooner. Horlick, who had 10.0% of her holdings exposed to Madoff, reportedly said that the regulators had "fallen down on the job."