An Asian version of the Bank for International Settlements (BIS) is being planned despite the admission of five of the region's central banks to the Basle-based organisation. Joseph Yam, chief executive of the Hong Kong Monetary Authority, pledged his support for closer ties among Asian institutions and said talks would continue. Mr Yam said there was a need for efficiency and effectiveness in financial intermediation in Asia. He said stronger co-operation among the region's central banks would be discussed this month. 'I would not be surprised if by this time next year there are concrete proposals of one thing or another,' Mr Yam said. His comments came after suggestions the momentum of co-operation might be stalled after the central banks of Hong Kong, Singapore, China, Korea and five others were admitted to the BIS. Hong Kong, China, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Australia agreed last September to study the setting up of an Asian BIS during a meeting of executives of East Asia and Pacific central banks. After a meeting of central bank governors in July, three working groups were established. One group met in the territory on harmonising banking standards. It is understood the two other working groups will meet later this month. One will meet in Australia to study central bank operations, including maintaining liquidity and managing reserves. The third working group, to be hosted by Japan, will look at the debt market and the development of financial infrastructure. Mr Yam said an Asian 'bank for central banks' would create deeper markets and markets with a higher degree of integrity. He said studies were under way on creating a region-wide clearing system for debt securities. The move towards an Asian BIS is likely to ease fears over speculative attacks against Asian currencies which have increased as the region's current account deficits have risen. It also will help settle nerves on the part of international investors on the strength of the Hong Kong dollar after the change of sovereignty next year. Mr Yam said there were areas that could be improved upon. He described as 'rather unfair' a BIS rule which provides that institutions doing business with non-OECD banks must pay higher charges because they are considered a higher credit risk. However, he said he was not hopeful of a quick solution. 'I think it can be modified in one way or another to assess the reality.'