LONDON, Dec. 16 (UPI) -- Shares of Europe's largest bank, HSBC Holdings, fell 1.2 percent after the bank said it could stand to lose $1 billion in a massive fraud scheme.
Federal Investigators have said New York trader Bernard Madoff's company could have defrauded investors of more than $50 million in a giant Ponzi scheme, a set-up in which investors are paid returns from other investors' purchases, rather than from legitimate earnings.
In addition, CLSA Asia Pacific Markets said HSBC may try to raise $14 billion to offset its exposure to U.S. and British loan defaults, where 75 percent of the bank's loans are concentrated, MarketWatch reported Tuesday.
CLSA, consequently, dropped its share price target about 30 percent for the bank's Hong Kong shares, MarketWatch said.
"Most of the 2008 impairment charges for banks were not even related to traditional loans," CLSA analyst Daniel Tabbush.
"If companies operating within economies are only now laying people off, the demand implications for buying products and services is going to be much worse in 2009 than it was in 2008," Tabbush said.