The head of the British Financial Services Authority had some surprisingly kind words for the hedge fund this week, arguing that there is no need for further regulation of the industry.

Hector Sants told the Hedge 2008 conference in London that hedge funds were holding up better than many other parts of the financial services industry, although he expects more hedge fund failures in the months to come. But despite calls on both sides of the Atlantic for tighter control over the industry, Sants says increased regulation is not needed.”

“There is pressure for more regulation in a rather general way,” he said. “I don’t particularly think more regulation is needed, but I do think more effective regulation is needed.”