The liquidity crisis is likely to prove fruitful for major banks, at least in the short term.The chief financial officer at Westpac Banking Corp (at an industry conference) and the Reserve Bank (in a regular commentary) both highlighted a shift in credit demand that would favour the business models of Australia's four major banks.Phil Coffey, CFO of Westpac, told the Finsia-Melbourne Centre for Financial Studies Banking and Finance Conference yesterday that "I see product spreads increasing, reversing a trend we have seen for 15 years."This was, Coffey said "due to supply and demand" and not the result of credit losses, a more usual driver of higher spreads."Being a major bank in Australia [it] feels like a much stronger competitive position than it has for quite a while, and perhaps has been for a decade."Coffey said while he expected to see improved product spreads this may not mean higher margins for banks.The RBA made similar points in its half year Financial Stability Review. The central bank wrote in the review that "the current increase in funding costs is likely to have some impact on the nature of competition in the financial system. "Traditional lenders that rely relatively heavily on retail deposits to fund their loans are likely to see their competitive position improve, and this in turn is likely to see more loans funded on the balance sheets of financial institutions, rather than in the capital markets."