By Lewis Jackson and Lucy Craymer

BRISBANE (Reuters) -U.S. and Australian officials said on Monday they were committed to improving financial connectivity in the Pacific, as lenders and policymakers from across the region met to discuss bolstering banking services amid increasing interest from China.

Pacific Island countries are facing challenges as Western banks end long-term relationships with their counterparts in small nations in the region and others look to close operations, limiting access to U.S. dollar-denominated bank accounts.

Australian Assistant Treasurer Stephen Jones said Canberra wanted to be the partner of choice in the Pacific, whether in banking or defence.

"We would be concerned if there were nations operating within the region whose principle objective was advancing their own national interest as opposed to the interests of the pacific island nations," Jones said on the first day of the two-day Pacific Banking Forum in Brisbane, when asked about Chinese banks stepping into the vacuum.

He declined to say whether China fit that description. Australia and the U.S. are co-hosting the forum.

Washington has also boosted efforts to support Pacific Island countries to curb China's influence.

"We recognise the economic and strategic significance of the Pacific region, and we are committed to deepening our engagement and collaboration with our allies and partners to bolster financial connectivity, investment, and integration," said U.S. Treasury Undersecretary Brian Nelson, who is responsible the department’s terrorism and financial intelligence office.

Western banks are de-risking to meet financial regulations, which has made it harder to do business in Pacific Island nations, in turn undermining financial resilience in these countries, according to experts.

Neither the U.S. nor Australia have yet to make detailed announcements at the forum, much of which is closed to media, but their comments come as Western nations who have traditionally held sway in the Pacific grow increasingly concerned about China's regional influence.

Beijing has signed key defence, trade and financial deals in the region. Bank of China has opened offices across the region and signed an agreement with Nauru to explore opportunities there earlier this year after an Australian bank said it would pull out of the country.

Nelson told those attending the meeting that the U.S. recognised and is committed to addressing bank de-risking across the Pacific.

"There is a lot to be gained by promoting financial integration around the world," he added. "But conversely, when correspondent banking relationships dwindle, the consequences can be substantial."

Nelson said over the past decade correspondent banking relationships in the Pacific had declined at twice the rate of the global average. The World Bank and Asia Development Bank is working on programmes to improve corresponding banking relations.

U.S. Treasury Secretary Janet Yellen said in a virtual address to the meeting that Washington's focus was on supporting the Pacific's economic resilience, including through strengthening access to correspondent banks.

"The United States is committed to an Indo-Pacific that is free and open, connected, prosperous, secure, and resilient. A strong and connected Pacific region has benefits for the United States and for the global economy," she said.