The media and markets took literally a speech to the Annual Stockbrokers Conference by Reserve Bank governor Ric Battellino in Sydney yesterday and therefore concentrated on his remarks about mortgage stress, bank lending and credit growth.

Given that the speech was entitled Recent Financial Developments and started with “My talk today is about some of the changes taking place in the financing of the Australian economy”, that approach was to be expected. The speech had been organised well before the current bout of nervousness about the banks emerged.

But more acute readers of the speech might have re-read it later and wondered if there was another, deeper message being delivered to the likes of Moody’s, the ratings group, the various nervous nellies and shorters and  the Australian banks for being too dependant on offshore funding.

The re-emergence of the Greek crisis, which has hit the eurozone (and seems to have stepped up a notch overnight), has been a catalyst for some of that comment.

From that downgrade by Moody’s last week, to odd comments from the ANZ’s CEO Mike Smith about funding costs rising, to Goldman Sachs downgrading its outlook for our banks and cutting their views on several of them, the Big Four banks, ANZ, NAB, CBA and Westpac, have all seen their share price tumble. It’s been a big part of the 7% (up to Wednesday) fall in local shares this month.

But Battellino’s speech could be read as also explaining why the RBA thinks Moody’s was wrong in cutting the ratings of our banks for their supposed high dependence on offshore borrowing, which could leave them exposed in another financial crisis.

Without mentioning Moody’s, Battellino rejected that claim (which has also been echoed by other commentators).

“Some people claim that the global financial crisis was a vindication of the view that offshore borrowing causes problems.

“But this misses the point that all banks were affected by the crisis, irrespective of whether they were borrowers or lenders in international markets.

“In fact, the Australian banks, which many see as being among the largest users of offshore wholesale markets, emerged from the crisis in better shape than most.

“While they benefited from a temporary government guarantee, so too did banks in most other countries.”

And he made a further point: even if demand for credit strengthens (which the RBA expects will happen), our banks won’t be forced offshore for top-up funds.

Battellino said the current period of weak credit growth is likely to be relatively short-lived in a growing economy. “It would be reasonable to assume that the rate of growth in credit will remain somewhere in the single-digit range. That rate of credit growth should be able to be matched by deposit growth, reducing the need to raise funds in wholesale markets.”

He said it was unlikely that banks’ funding patterns will return to those seen before the 2008 financial crisis, which saw a heavy reliance on offshore markets. “Changes to supervisory rules and market conditions have made pre-crisis funding patterns less attractive,” he said.

“In the economic climate likely to be faced by banks over the next few years — solid economic growth but with cautious behaviour by households and relatively low inflation — it would be reasonable to assume that the rate of growth in credit will remain somewhere in the single-digit range.

“That rate of credit growth should be able to be matched by deposit growth, reducing the need to raise funds in wholesale markets. (So there is RBA’s reply to that Moody’s downgrade.)

“In the current environment, it is unlikely that households will have much enthusiasm for increasing indebtedness. The most likely scenario is that household borrowing will continue to grow at a relatively subdued rate for some time yet. From the Reserve Bank’s perspective, this would be a welcome development.”

So basically  the speech was a bit of a 101 primer for Moody’s and others who see the banks in this country as being exposed to offshore funding pressures.

The RBA doesn’t single out critics and others who are wrong (in its view) and respond directly to them, but every now and then a senior official will make a speech (as Battellino did yesterday) that has several levels of meaning for those in financial markets.

Note that this speech was devoid of any current monetary policy commentary, he and the bank were not allowing their message to be obscured by rate-rise-looms chat.