Hedge funds provided as much as 40% of the money raised this year by U.S. and European banks as they sought to offset losses and meet government capital requirements, according to a Morgan Stanley report.

Financial companies have raised about $200 billion from common stock and rights offerings so far this year, data compiled by Bloomberg show. Worldwide, these companies have taken more than $1.7 trillion in writedowns and credit losses since the crisis began in mid-2007.

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