Charlie McCreevy, the European Union internal market commissioner, yesterday rode to the defence of hedge funds and private equity groups, dismissing recent attacks on the sectors and insisting there was no reason to tighten the rules governing their activities.

"Hedge funds and private equity are good for the market. They have given greater liquidity, they have added shareholder value and they have helped the rationalisation and innovation of companies," the commissioner told the Financial Times in an interview.