When Long-Term Capital Management spectacularly collapsed in September 1998, lenders to the highly-geared hedge fund panicked. But they didn’t just withdraw loans to John Meriwether’s LTCM, until then Wall Street’s best customer. Many investment banks slashed lending to the entire hedge fund industry, forcing firesales of assets into a falling market and creating massive losses for funds.

This time round financiers of hedge funds have not panicked. In fact, since the credit crunch started in August pressure from the largest hedge funds has seen some bankers improve credit terms, even as the profitability of their lending dropped.