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Make RBS business bank, says Cable

Business secretary Vince Cable has called for Royal Bank of Scotland to be split up to form a British business bank.

In a letter to Prime Minister David Cameron and deputy Prime Minister Nick Clegg that was leaked to the BBC last week, Cable says the government should recognise that RBS cannot succeed in its current form.

He wrote: “My suggestion is that we recognise that RBS will not return to the market in its current shape and use its time as ward of state to carve out a British business bank with a clean balance sheet and a mandate to expand lending rapidly to sound businesses.”

RBS, which is 82% owned by the government, last month reported a loss of £2bn for 2011.

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