Suspend Goldman Sachs as government adviser, says Clegg

Mr Clegg said recklessness and greed had disfigured the banking industry

Goldman Sachs should be suspended as an adviser to the government until fraud allegations are investigated, Nick Clegg has said.

The Liberal Democrat leader referred to US allegations that the investment bank had defrauded investors.

He said it was a reminder of the "recklessness and greed" that had "disfigured" the banking industry.

Mr Clegg told a news conference in central London the allegations were "extraordinarily serious".

He said: "We believe that Goldman Sachs should now be suspended in its role as one of the advisers to the government until these allegations are properly looked into."

'New ecology'

Treasury spokesman Vince Cable added: "The Goldman issue is not simply an issue for the US, it is emerging that the British taxpayer may have lost something in the order of £500m, perhaps more, as a result of the guarantee for the complex derivatives that were given by ABN Amro, which of course is now part of RBS, so there is a very strong British interest in this."

He added that these were "serious allegations which have yet to be proved".

Mr Clegg made the comments as he announced his party's plan for a "fundamental change" to the UK banking system.

He said he wanted to split up the banks "so low-risk retail banking and high-risk investment banking are never mixed up with each other". FULLSTORY