Hedge fund pioneer George Soros has called for regulation of such highly speculative investment vehicles and the banks that lend to them. "I think that hedge funds need to be regulated like all other market participants," Soros told a conference in Brussels, where he was promoting his most recent book. The billionaire financier said that hedge funds would be best regulated through the banking system by requiring banks that lend to them to hold greater reserves.

 Hedge funds are currently largely unregulated despite growing calls for action from authorities. Although the current crisis in the financial sector originated largely in the banks - the regulated part of the market - hedge funds have faced intense scrutiny recently because of their huge leverage. "I think there are some hedge funds that have been operating as unlicensed insurance companies by writing credit default swaps," he said. While global financial markets were witnessing the bursting of what Soros called a "super bubble," he said that the world did not face a "replay of the 1930s (Great Depression). "It is the job of the authorities to prevent the system from collapsing. They know how to do it and they are doing it," he said. "There is no question of a replay of the 1930s."