Hedge funds have argued that the $1.9 trillion (€1.4 trillion) industry has been made a scapegoat for the failures in the regulated banking system, after having to defend themselves against the latest attack from a European government this week, when the Italian finance minister called for their abolition.

Hedge fund industry bodies in the UK and US said it would be a "serious mistake" for Giulio Tremonti and Italy's Government to consider abolishing the funds that are both an "essential source of capital to investors" and an important employer. Italy's own nine-year old hedge fund industry comprises around 300 funds with about €34bn.