The perception of the free banking era as an era of “wildcat" banking marked by financial instability and, in particular, by widespread significant losses to noteholders also turns out to be wide of the mark. Recent scholarship has demonstrated that free bank failures were not as common and resulting losses to noteholders were not as severe as earlier historians had claimed.
Actually, this is another version of the old concern about the current account deficit: what will happen if markets suddenly do not want to fund our deficit? It has long been a visceral fear among Australian officials and economists that global investors will suddenly take a dim view of us.