Gary Gensler, chairman of the Commodity Futures Trading Commission, the US derivatives regulator, on Wednesday signalled the Obama administration’s desire to extend oversight of hedge funds, saying they had “destabilised” the financial system by causing “runs on liquidity”.

His comments come as Washington is preparing for an overhaul of financial regulation, with the White House proposing an enhanced role for the Federal Reserve and the creation of a ”council of regulators” to monitor systemic risk.