Australian banks are likely to continue lowering their exposure to overseas funding markets, a senior member of Australia's central bank said today.
After relying largely on overseas markets to fund their operations in years past, Australian banks have been raising less of their wholesale funding from offshore than has matured over the past three or four years.
Moreover, Australian banks are overall raising less than are their global counterparts, on a relative basis, which is likely to continue for some time, said Guy Debelle, assistant governor (financial markets) at the Reserve Bank of Australia.
"In net terms, the banks have been repaying their foreign liabilities," said Debelle, adding that market participants are too focused on banks' liabilities in the wake of the credit crisis and not paying enough attention to assets.