The decision was confirmed yesterday at a regular monthly meeting of the Bank for International Settlements (BIS) of the Group of Ten (G10) central bankers in Basle, Switzerland. It follows months of discussions about how to strengthen banking systems in emerging countries following Mexico's financial crisis in late 1994.
"It's an important move. We are reaching out to world-wide supervisors to get effective supervision," a source at the BIS said.
Earlier this year the BIS decided to extend membership to the central banks of nine countries: Brazil, China, Hong Kong, India, Korea, Mexico, Russia, Saudi Arabia and Singapore. The decision is part of a broader move by international institutions such as the International Monetary Fund and World Bank to give a greater say to the world's new economic powers.
Hans Tietmeyer, chairman of the G10 central bank governors' committee and president of the Bundesbank, said after the meeting yesterday that the International Monetary Fund was interested in fostering co-operation between the Basle Committee on Banking Supervision and the representatives from emerging countries.
"I hope in the end they will elaborate some guidelines for supervision. On one hand for the industrial countries and also for emerging countries," Mr Tietmeyer said.
Recommendations by the Basle Committee, made up of supervisors from the G10 and Luxembourg, tend to form standards for banking practice globally and the G10 hopes to make its work more accessible to non-G10 supervisors.