ESSEN, Germany (Reuters) — The Group of Seven richest nations vowed on Saturday to push ahead with better scrutiny for hedge funds, calling for vigilance on the risks posed by the $1.5-trillion industry.The G7 asked the international Financial Stability Forum to take a fresh look at hedge funds and report back in time for the next meeting of major industrialised nations in May.

“Given the strong growth of the hedge fund industry and the instruments they trade, we need to be vigilant,” the final G7 communiqué said. “The assessment of potential systemic and operational risks associated with these activities has become more complex and challenging.”

The rapid expansion of hedge funds is causing concern for policymakers because of the often-risky nature of their trading strategies and potential repercussions for global financial markets if a large fund runs into difficulties.

German Finance Minister Peer Steinbrueck, who had put hedge fund transparency on the agenda for this weekend’s meeting of G7 finance officials in the industrial city of Essen, said officials would also meet with hedge fund management to work on industry initiatives, such as common standards.

“We will work towards hedge funds developing best practices,” Steinbrueck said, noting that hedge funds also made a positive contribution to financial markets.