They should shut the AFR and just publish Chris Joye instead, much cheaper, more interesting and insightful:
One of the higher probability future crises Australia could confront is a concurrent sovereign and financial credit calamity in which foreigners dump bonds issued by our government and banks, catastrophically escalating costs for both.
…The embedded financial stability risk is that Australian banks are forced to hold $195 billion of these government securities for “liquidity” purposes. After the global financial crisis regulators decided banks needed to be more liquid to mitigate deposit runs and/or the freezing of bond markets. With the advent of the government guarantee, it is unlikely we will see a deposit run again. The four major banks are, however, quite reliant on foreign investors to help plug the funding gap of about 35 per cent that is not filled by deposits and equity.
