GOLDMAN SACHS'S Dublin-based retail bank is set for a major boost after the company said it was consolidating its operations after seeking Federal Reserve protection.

In a statement released early yesterday, Goldman Sachs said that its New York and Dublin commercial banks together held $20 billion in customer deposits. It is already moving its US lending operations and subsidiaries into its New York-based commercial bank, Goldman Sachs Bank USA.

Its Dublin-based commercial subsidiary, Goldman Sachs Bank Europe plc, which was founded in 2007, will come under Federal Reserve regulation as the US government rushes to stop the collapse of confidence in the market.

The bank, based in Hardwicke House in Upper Hatch Street, will take a more central role as Goldman Sachs moves into the commercial banking sector.

Both Goldman Sachs and Morgan Stanley announced yesterday that they had asked to become holding companies under Federal Reserve oversight.

The move comes after the Federal Reserve carried out an extensive review of the two investment banks' operations following the near collapse of Bear Sterns last March. The move effectively kills off Goldman Sachs and Morgan Stanley's investment bank status, allowing them to operate as commercial banks.

The US government has separated investment and commercial banks since 1933, to protect investors following abuses that lead to the 1929 Wall Street crash.

The Federal Reserve is offering the investment banks a way out by allowing them to trade as commercial banks, take in deposits from members of the public and possibly buy up other commercial banks.

"We're not going to stop wealth management and growth," Mr van Praag said. "We expect operations in Dublin to grow as a result of all of this."

He said that Goldman Sachs had already submitted its request for holding company status to the Federal Reserve and that it should take five days before the move is approved under US anti-monopoly legislation.

"The Federal Reserve may expedite the process, given the circumstances, but we're looking at five days," he said.

The company's US-based equivalent, GS Bank USA, will have more than $150 billion in assets after it had taken in business from other subsidiaries and will be one of the ten largest banks in the US, Goldman Sachs said.

Goldman Sachs said in its statement that it has decided to come under Federal Reserve oversight "in view of market developments" and that the ability to source insured bank deposits through the Federal Reserve would provide a greater degree of safety and soundness.

The company said its decision to come under Federal Reserve protection was "accelerated by market sentiment" but would allow Goldman Sachs access to permanent funding.

Analysts say the company is in a better position than most investment banks, with a debt-to-equity ratio lower than Morgan Stanley or the now-bankrupt Lehman Brothers.