The Financial Services Authority (FSA) said it did not see the need for more regulation of hedge funds, and that most funds had so far weathered recent financial turmoil fairly well.

FSA Chief Executive Hector Sants said at a conference that "hedge fund managers in general are weathering the market turmoil pretty well in the circumstances, certainly versus other components of the financial services industry", but added that he expected more funds to fail.

He also pointed out that he is not in favour of more regulation but thinks that more effective regulation is needed.