Large Wall Street firms privately harboured suspicions about Bernard Madoff’s investment business, in some cases steering clients away from dealing with him, but were reluctant to share their concerns with regulators, according to US bankers.

Banks were sceptical that Mr Madoff could deliver the consistently high returns that he reported, and they were also put off by a lack of transparency at his investment firm. For these reasons, big Wall Street firms are notably absent from the long list of victims of Mr Madoff’s alleged Ponzi scheme.