FRANKFURT - GERMANY'S financial sector has been affected only slightly by the suspected multi-billion-dollar Madoff swindle, according to several institutions reached on Tuesday by AFP.

'It seems that we have not been hit,' a spokesman for Postbank, the biggest German retail bank said.

On Monday, the biggest German bank, Deutsche Bank, said it has 'no exposure' to losses in the suspected swindle, which was said to be run by ex-Wall Street heavyweight Bernard Madoff.

Madoff was arrested on Thursday and allegedly confessed to defrauding investors of US$50 billion (S$73.9 billion) in a scam that collapsed after clients asked for their money back owing to the global financial crisis.

Global finance giants have admitted huge potential losses in the suspected pyramid fraud scam run by the 70-year-old Wall Street veteran.

The German federation of public banks VOeB said it had not been affected by the scandal, while the second biggest German bank, Commerzbank, declined to comment on possible losses.

On Monday, insurance giant Allianz said it was exposed to the suspected fraud, but that the level of exposure was 'not significant,' according to a spokesman. The exact amount remained to be established, she said.

Elsewhere in Europe, leading financial institutions were not all as lucky.

The Spanish bank Santander, number two in Europe in terms of capitalisation, said its clients faced up to 2.33 billion euros (S$4.7 billion) in losses, and British banks could also lose as a result.

The French banks Natixis and BNP Paribas could lose 450 and 350 million euros respectively in the debacle.

US authorities allege that Madoff delivered consistently strong returns to clients by secretly using the principal investment from new investors for payments to other investors. -- AFP