Bank stockpile for a funding drought

Even if the World Bank's worst-case scenario doesn't eventuate, the eurozone debt crisis will impact Australian banks' funding costs for years to come.

The World Bank’s warning that the global economy is on the verge of another financial crisis, with the prospect of a much broader freezing of capital markets than occurred in the wake of the collapse of Lehman Brothers in 2008, would be resonating loudly with bank treasurers.

The major Australia banks entered 2012 knowing that they would have to raise close to $100 billion of funding this year, with a significant proportion of it coming from wholesale markets, mainly offshore.

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