Australian government monitoring US bank collapses after Silicon Valley Bank failure

Dr Chalmers said the government, Treasury and the nation's financial regulators were closely monitoring the fallout from the collapse of Silicon Valley Bank, Signature Bank and Silvergate Capital Corporation, which had a combined value of $488 billion.

The treasurer said on Monday he, Assistant Treasurer Stephen Jones and Industry Minister Ed Husic met with officials from Treasury, the Reserve Bank of Australia, the Australian Prudential Regulation Authority and the Australian Securities and Investments Commission to discuss the situation and measures taken by the US government to protect its financial system.

Moving to head off the risk the situation could evolve into a destructive run on banks, the US Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation have stepped in to guarantee all deposits held by the institution.

US President Joe Biden assured Americans that they "can have confidence that the banking system is safe. Your deposits will be there when you need them".

Dr Chalmers said that "US authorities have assumed full control over Silicon Valley Bank and report that it is operating as normal, and depositors have full access to their funds".

"Australians should be reassured that we have a resilient, well-capitalised banking system that has strong liquidity coverage."

Several Australian tech companies have been caught up in the failure of SVB bank, including design platform Canva, online document firm Nitro Software and accounting software company Xero after having millions in deposits and payments in accounts at the institution.

While acknowledging it had funds lodged with SVB, Canva said in a statement it had safety nets in place to ensure its operations were not compromised by the bank's collapse.

"We're disheartened to see the news about Silicon Valley Bank and the impact it's having on the tech ecosystem," Canva said. "We're in the fortunate position of having the majority of our cash outside of their banking system.

"More broadly, we're also very mindful that not everyone is as lucky as us and we'll be on the lookout over the days and weeks to come to see if there are ways we can be supportive of the broader ecosystem."

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APRA said Silicon Valley Bank had "limited connections" with the Australian banking system but it was monitoring the situation closely.

The regulator said it was, "intensifying supervision of the local banking industry and is seeking more information from them on any potential impacts".

"APRA is also working with other Council of Financial Regulators (CFR) agencies. Australia's financial system is strong, our banks are resilient, well-capitalised and have strong liquidity coverage."