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Australia 'closely monitoring' global financial turmoil -treasurer

Published 03/16/2023, 06:35 PM
Updated 03/16/2023, 06:40 PM
© Reuters. FILE PHOTO: The Silicon Valley Bank branch office in downtown San Francisco, California, U.S., March 13, 2023. REUTERS/Kori Suzuki

SYDNEY (Reuters) - Australia is closely monitoring the current global financial turmoil, including the situation at Swiss lender Credit Suisse and some banks in the United States, Treasurer Jim Chalmers said on Friday.

"Whether it's Silicon Valley Bank and the steps taken by the American authorities, whether it's Credit Suisse ... we're monitoring it very, very closely," Chalmers told ABC Radio.

He said he was receiving at least two daily updates from Australian authorities on the latest global financial issues.

Large U.S. banks injected $30 billion into First Republic Bank (NYSE:FRC) on Thursday, swooping in to rescue the lender caught up in a widening crisis triggered by the collapse of two other mid-size U.S. lenders over the past week.

Banking stocks globally have been battered since the collapse of Silicon Valley Bank, affecting Credit Suisse within days, forcing it to borrow up to $54 billion from Switzerland's central bank to shore up liquidity.

Chalmers said some concerns had eased after Credit Suisse received help from the Swiss central bank and U.S. authorities stepped in to guarantee all deposit accounts at Silicon Valley Bank.

© Reuters. FILE PHOTO: The Silicon Valley Bank branch office in downtown San Francisco, California, U.S., March 13, 2023. REUTERS/Kori Suzuki

The moves had some "calming effect" but Chalmers said vulnerability and uncertainty across the global financial system remained. Even so, Australia was in a good position to withstand some of the volatility, he added.

"Our banking system is really well capitalised, it's got a really strong liquidity position, it's well regulated and we are well placed in Australia," Chalmers said.

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