Hong Kong's standing in world financial markets has received a significant boost after it became one of nine countries invited to join the Bank for International Settlements (BIS), a forum for central banks dominated mostly by European and other industrialised countries. The territory's post-1997 position was further affirmed with China's central bank, the People's Bank of China, being asked to participate as a separate member, recognition the two financial systems are to be kept separate after the handover. Hong Kong Monetary Authority chief executive Joseph Yam said: 'This goes to show the international financial community is fully supportive of the one country, two systems policy enshrined in the Basic Law.' The invitation marked the first time in 25 years BIS had enlarged its membership. Nine central banks, including five from Asia, were asked to join. They are: Hong Kong, Singapore, China, South Korea and India. The others are: Brazil, Mexico, Russia and Saudi Arabia. The increased Asian participation comes at a time when Asian bankers have been urging a similar body be established in Asia. The basis for selection of new members includes economic and financial criteria and the central banks' involvement and contribution to global economic and financial co-operation. While seven of the new members were chosen for the sheer size of their economies, Hong Kong and Singapore were picked for the significance of their financial markets. BIS membership consists of 32 central banks, notably the G-10, and most European countries. Financial Secretary Donald Tsang said: 'The invitation to join the BIS is a clear recognition of Hong Kong's status as a leading and autonomous international financial centre and Hong Kong's increasingly active role in co-operation among central banks.' A membership status will surely give Hong Kong a louder voice in the deliberation and drafting of international banking regulations. Founded in 1930, the Basle-based bank is owned and controlled by central banks and is generally recognised as 'the central bank of central banks' and 'the only central bank on an international level'. Its primary task is 'to promote the co-operation of central banks and to provide additional facilities for international financial operations.' It has developed standards for banking supervision and payments systems that Hong Kong and most countries have recognised and followed. Noted among all is the capital adequacy ratio which prescribes the amount of capital banks need to put up when extending loans to ensure prudent management. Yet, the lack of Asian participation has resulted in policies contested hotly by some Asian countries. One example was the classification of Hong Kong and Singapore as developing countries, placing their banks in a competitively disadvantaged position. It is believed that with increased representation, the issue will be brought up for discussion. Since September 1994, the 11 countries from which BIS board members have been drawn have all been from Group of 10 nations. After receiving invitations, new members will subscribe to BIS shares. The authority declined to divulge the price for subscribing to the shares. The whole process will be concluded by March next year.