Australia has announced that it will join negotiations to establish a new a Chinese-led Asian regional bank.

The U.S. has expressed concern the new Asian Infrastructure Investment Bank, or AIIB, will allow looser lending standards for the environment, labor rights and financial transparency. The U.S. also worries the new bank will undercut the World Bank, where the U.S. has the most clout, and the Asian Development Bank, where it is the second-largest shareholder after Japan.

Prime Minister Tony Abbott, Foreign Minister Julie Bishop and Treasurer Joe Hockey said in a joint statement on Sunday that the government will sign a memorandum of understanding that will allow Australia to participate as a prospective founding member in negotiations to set up the bank.