British Prime Minister Gordon Brown emerges from television studios in London -- January 23, 2009
British Prime Minister Gordon Brown emerges from television studios in London -- January 23, 2009 - 
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Bob Moon: Goldman Sachs continues to feel the fallout from the charges filed against it Friday by U.S. financial regulators. British Prime Minister Gordon Brown is now saying he wants investigations against the firm to expand in his country. The Securities and Exchange Commission filed civil fraud charges against the firm for allegedly setting up a real estate investment fund that was designed to fail. Joining us now live is our European correspondent, Stephen Beard. Good morning, Stephen.

Stephen Beard: Hello, Bob.

Moon: So, why is the British government getting involved in the crackdown on a Wall Street firm?

Beard: Because among the biggest victims of the alleged fraud are British taxpayers. The complicated financial product at the center of this case was insured by a bank which was taken over by the Royal Bank of Scotland, which itself had to be taken over by the U.K. government when it got into trouble. This meant that a bank now owned by the British taxpayers had to pay more than $800 million to Goldman Sachs when this derivative product blew up. So the government has now called for the British regulator to investigate this Goldman deal.

Moon: Does Goldman have to worry about a domino effect here, investigations from more and more countries?

Beard: Well possibly, yes. I mean the German government is also pretty angry, it says it's considering legal action against Goldmam, because it's reported at least one big German bank may have lost heavily on this deal.

Moon: Now it seems to me this investigation could re-energize voter anger against the big banks. How are Europeans reacting to this news?

Beard: Well the markets certainly aren't happy; bank shares fell across the board on the London stock market first thing this morning. There is a fear that this case is going to intensify the regulatory backlash against the banks. And could unleash a whole volley of lawsuits from disgruntled investors against a wide range of banks. And this story has caused particular consternation in London, it's reignited anger against the banks. And this is a big worry for Britain, because you know, this is undermining an absolutely crucial part of the U.K. economy. So yes, there is a fear we're entering the next chapter of the financial crisis.

Moon: Thank you -- Stephen Beard in London.

Beard: OK, Bob.