Finance ministers, who got together at a G7 meeting in Essen on 9-10 February 2007, said they would follow up on the role of hedge funds in the stability of international financial markets and asked the Financial Stability Forum to draft a report on the issue.
The G7 countries include France, the US, the UK, Germany, Japan, Italy and Canada. Russia, which usually joins the group make up a G8 summit, did not participate in the meeting.
Ministers said in a statement that hedge funds "contributed significantly to the efficiency of the financial systems". However, they added that activities were becoming "more complex and challenging" and "given the strong growth of the hedge fund industry and the instruments they trade, we need to be vigilant".
The hedge-fund industry comprised €942 billion ($1.225 trillion) of assets under management in 2006, according to Hedge Fund Research. They have seen strong grown in markets around the world, especially the US and the UK. Unlike other funds, they are currently not subject to any direct regulation.
European Central Bank (ECB) President Jean-Claude Trichet called on the industry to develop voluntary standards and codes.
