The risk of a global financial crisis triggered by hedge funds could be tackled by compiling an international register of activity in the fast-growing industry, the European Central Bank argued on Monday.

The ECB’s backing for a centralised register – updated daily or even more frequently – could reinvigorate the debate among global regulators about how best to deal with the risks posed by highly leveraged hedge funds.

It came as Germany’s finance ministry said it had received “very encouraging” signals from London and Washington in support of its initiative to increase the transparency of hedge funds, something which will form part of its presidency next year of the Group of Eight industrialised nations.

International regulators have long agreed that direct controls on hedge funds are impractical and that their focus should instead be on increasing transparency and monitoring the involvement of hedge funds with those bodies that do fall within their regulatory scope, including banks and other financial institutions.

So far, however, there had been no consensus on the best way forward.

Thomas Mirow, Germany’s deputy finance minister, travels this week to Washington to discuss Berlin’s plans with the US Treasury. The proposals also include establishing a central register of hedge funds.

The ECB has been among the most outspoken institutions about the risks posed by hedge funds.

Lucas Papademos, the ECB’s vice-president, acknowledged on Monday that the collapse of Amaranth Advisors in September had had “little discernible impact” on markets, but he pointed out that the failure occurred against “a backdrop of rather benign market conditions” and that in different circumstances the impact would have been more disruptive.

The idea of a central register floated in the ECB’s latest “financial stability review” would be “a topic for discussion” at next year’s G8 meetings in Germany, Mr Papademos said. But he refused to comment on whether such ideas could form the basis for the long-sought international consensus on hedge fund regulation.

Like other regulators, the ECB sees hedge funds as bringing economic advantages – promoting financial innovation, for example. But it worries about the risks posed by their “herding” instincts, by which many funds follow similar strategies

In its report on Monday, the ECB said that in their dealings with hedge funds “the prime brokerage businesses of banks have continued to test the boundaries of their risk appetite and prudence in risk management”.

An “international highly leveraged institutions’ (HLI) credit register” would contain centralised information on the exposures of “all significant regulated firms” to hedge funds.

Implementing such a register would be a complicated, the ECB report concluded but “there are already some market products available which have features similar to the HLI position register and which could potentially evolve into market-based solutions.”

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