Hedge funds called for restrictions on short selling to be scrapped on Monday, saying falls in financial shares even after the practice was banned in many countries demonstrated it was not to blame.

Many of London’s biggest hedge fund managers pointed out in private that Bradford & Bingley and Fortis needed government rescues even though short selling was no longer possible, while shares in financial companies had fallen in Europe and the US since the rally after the ban was introduced. “We’ve established that short selling wasn’t a factor in the latest share price decline,” said Andrew Baker, deputy chief executive of the Alternative Investment Management Association. “The ban was well-intentioned but wide of the mark and we would like to see it removed as quickly as possible.”