(Bloomberg) -- Australian Treasurer Jim Chalmers has convened a meeting of his nation’s top financial regulators on Thursday after speaking with key global officials as part of ongoing monitoring of international banking stresses.

The meeting was called after Chalmers spoke at length Tuesday morning with US Treasury Secretary Janet Yellen and late Monday with European Central Bank President Christine Lagarde. They discussed the banking systems in Europe and America, global financial volatility and the impact of higher interest rates.

“It’s clear from my conversations that international authorities are prepared to do what’s necessary to reassure markets,” Chalmers said in a statement. “We’re not immune to what’s coming at us from overseas, but our own economy and financial system are well-regulated, well-capitalized and well placed to respond to these challenges.” 

The Council of Financial Regulators typically meets quarterly and at its most recent gathering earlier this month members discussed the global response to the sudden collapse of Silicon Valley Bank. Since then, another American lender — Signature Bank — has gone under while Credit Suisse Group AG had to be bailed out, raising fears of global contagion. 

Chalmers has also been in talks with the heads of Australia’s four major banks and is being briefed daily on international developments. 

The treasurer’s comments came shortly after the chair of Australia’s prudential regulator John Lonsdale revealed the outcome of recent stress tests that showed the country’s banking system is strong enough to survive a shock. 

The regulator conducted a “theoretical stress test” of the 10 largest banks in a scenario where the cash rate rises to 4.5%, from 3.6% now, and the economy slides into a recession with unemployment soaring to 11%, from 3.5% now, Lonsdale said at an AFR conference in Sydney.

“All incurred significant credit losses as borrowers missed repayments and many fell into negative equity,” he said, emphasizing that the result isn’t a forecast. “Despite this, the banks in aggregate remained above minimum capital requirements.”

Thursday’s gathering of Australia’s Council of Financial Regulators, which includes the central bank, comes just five days before its April policy meeting.

Money markets are pricing in an interest-rate pause at the April 4 gathering, having swung from expectations of a hike prior to the global financial instability. Last week, both the Federal Reserve and Bank of England pressed ahead with rate increases, viewing inflation as a greater threat than financial stability risks. 

(Adds APRA chair’s comments from sixth paragraph.)

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