In that case our problem might be not being able to absorb that capital. But then the banks would be unlikely to have serious funding problems. If the thing that goes wrong is a serious slump in China’s economy, the Australian dollar would probably fall, which would provide expansionary impetus to the Australian economy.
In the corporate bonds and CP markets, the issuing environment for firms with high credit ratings is accommodative, but the environment for firms with low credit ratings is severe. Credit demand in the private sector continues to follow a downtrend mainly because firms’ business fixed investment remains sluggish while continuously reducing their debts.