In corporate news, Europe's biggest bank, HSBC, has joined a list of top names in world finance, admitting huge potential losses in a suspected pyramid fraud scam run by ex-Wall Street heavyweight Bernard Madoff.

Shares in Santander, the biggest bank in Spain and the second-largest in Europe after HSBC, plunged after the lender said it had exposed more than three billion dollars to Madoff Investment Securities in New York.

Pedro Solbes, Spanish Chancellor of the Exchequer and Second Vice President, said the impact of the alleged fraud on the Spanish economy was nothing to worry about. But he noted international financial institutions should be aware of this kind of situation.

"That is why the International Monetary Fund must now make a multilateral and effective supervision to identify the connection among the financial conditions, the real economy, the bank systems and all credits."

Solbes said the International Monetary Fund must always ensure that international economic standards are correctly applied.

Among the world's biggest banking institutions, Royal Bank of Scotland Group, Man Group PLC, France's BNP Paribas and Japan's Nomura Holdings all reported they had fallen victim to Madoff's alleged 50 billion US dollar pyramid scam.

70-year-old Madoff, well respected in the investment community after serving as chairman of the Nasdaq Stock Market, was arrested on Thursday.