Firstly, it meant households became less inclined to hold their savings as bank deposits, and second, the pool of funds created by superannuation increased demand for securities such as bank securities. Within this trend away from deposits to funding through securities markets, there were also forces that resulted in banks increasing their use of offshore funding.
As an example, a substantial proportion – about 20 per cent – of superannuation savings flow offshore, mainly into foreign equities. This reduces the pool of savings available domestically to banks and, other things equal, increases the amount of offshore funding banks need to undertake.