The US banking sector is "stabilising" after the recent failures of Silicon Valley Bank and Signature Bank rattled the industry, Treasury Secretary Janet Yellen told a lenders' meeting on Tuesday.

The collapses caused a crisis of confidence, with many customers of similarly sized banks withdrawing their money and depositing it in larger institutions – considered too big for the government not to bail them out if they faced failure.

But "outflows from regional banks have stabilised" following authorities' moves to shore up confidence and stem contagion, said Yellen in a speech to the American Bankers Association (ABA) in Washington.

"Our intervention was necessary to protect the broader US banking system," she added.

"And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion."

For now, the banking industry remains resilient despite the upheaval, said ABA chief executive Rob Nichols at the event.

"The overall banking industry remains strong, resilient, well-capitalised, liquid and serves customers and communities extremely well," he said, noting that authorities took swift action to prevent a bad situation from spreading.

After SVB's collapse, the Treasury, Federal Reserve and Federal Deposit Insurance Corporation set out plans to ensure its customers would be able to access their deposits. A similar exception was announced for Signature Bank.

The Fed also introduced a new lending tool for banks in an effort to prevent a repeat of SVB's quick demise, and has since launched a drive with other major central banks to improve banks' access to liquidity.

"I believe that our actions reduced the risk of further bank failures," Yellen said.

She stressed that "recent developments are very different than those of the global financial crisis."

"Back then, many financial institutions came under stress due to their holdings of subprime assets. We do not see that situation in the banking system today," she said.

For now, she maintained that the US banking system remains sound, although authorities will need to re-examine the current regulatory regimes.

But there are fears over which lender could be the next domino to fall, with 11 US banks announcing last week they would deposit US$30 billion into First Republic amid worries surrounding the bank.

A coalition of midsized US banks has also asked federal regulators to guarantee all of their customers' deposits for two years, a move that would help to halt an "exodus of deposits" from smaller banks, Bloomberg reported on Saturday. (AFP)