Moody’s downgraded the big four Australian banks last night? Why? Because they are too dependent on wholesale funding. That means rather than relying on deposits from customers for most of their funding, they borrow it in the market. Lehman (and all the big investment banks) did the same, a big risk when wholesale markets freeze up…
Lehman was three years ago. Why in the hell does Moody’s wait three years to make a ratings move based on ancient information? Really calls into question the credibility of the raters, again.
Market is shrugging off the downgrade and AUD has bounced back, now at 1.0605.
