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The treasurer says Australia's banking system is resilient as authorities monitor the collapse of Silicon Valley Bank closely for possible domestic repercussions.
The downfall of the California-based Silicon Valley Bank is the second-biggest banking collapse in US history and the largest failure since the Global Financial Crisis.
The bank, whose customer base was concentrated in the technology and startup space, folded on March 12 and sent shockwaves through financial and tech spheres.
The failure of the bank and two other cryptocurrency-focused lenders prompted the US government to step in and protect depositors so they have full access to their funds.
Australian government ministers, Treasury officials and financial regulators met on Monday to discuss the unfolding crisis.
"We will continue to work closely with our regulators, the tech sector, investors and the broader financial sector to understand the implications as the situation evolves, including the impact on Australian industry," Treasurer Jim Chalmers said on Tuesday.
He said Australia's own banks were resilient.
"Australians should be reassured that we have a resilient, well-capitalised banking system that has strong liquidity coverage," he said.
"While Australia is not immune from ongoing uncertainty in the global economy, our own economy and financial system are well placed in the face of these challenges."
AMP Capital economist Shane Oliver said the closures are unlikely to foreshadow systemic problems with the broader US banking system but did show monetary policy tightening was taking effect.
He said the signs of financial instability would bolster the case for slowing interest rate hikes, including in Australia.
"The Reserve Bank of Australia has become less hawkish and has opened the door to a pause if data shows further cooling and slowing inflation," he wrote in an analysis.
"With total household debt servicing costs pushing to record levels, our view is the RBA should and will soon pause. US financial problems add to the case."
