Among the reasons highlighted by Moody's Investors Service for lowering the credit rating of big banks in Australia to Aa2 was an analysis of their likely demand for offshore debt over the coming years.In the agency's opinion this will remain little changed in spite of regulatory efforts to steer the banks towards more funding from deposits, and the abundant growth in deposits reported by the banks themselves.Patrick Winsbury, a senior vice president based in Moody's Sydney office, said that, "In the years leading up to the global financial crisis the constant comment was that Australian banks looked strong in most respects but they had relatively lower amounts of liquid assets relative to wholesale, short-term maturities."And that was increasingly a credit negative."Then we went into the financial crisis and of course there were extraordinary support measures put in place by government."And those support measures kept the ratings of banks globally where they were, very close to the government rating."As we've come out of the crisis, we've seen a wind-back of those measures. In Australia the wholesale guarantee ended last year. Repo amounts at the RBA are down this year and we're ending the retail deposit scheme in October."So, what we, as a rating agency, are saying is, taking a long-term view... the extraordinary measures are winding down and we're starting to focus again on a five- to seven-year view."Pre-crisis, we had a decade of extraordinary stable funding conditions. Liquidity was cheap and plentiful."Winsbury also highlighted the need to fund the expected recovery in demand for business finance over the coming years, which would also reverse some of the recent deposit flows.He said much of the recent increase in domestic deposits had come from the corporate sector and that when the cycle turns, and credit demand eventually picks up, the ratio of corporate deposits to loans will fall. One handicap remaining for the banks is the preference by trustees of superannuation schemes for asset allocations weighted toward equities and offshore markets rather than to fixed income securities, which means that "only a low proportion... [of investment flows] are available to fund the banks". Winsbury also pointed to the Reserve Bank of Australia's analysis of trends in financing the current account deficit, published in late 2010, which highlights the fact that gross wholesale funding needs by banks are "likely, in turn, to perpetuate the banking sector's requirement for offshore funding."