The ratings on Australia and New Zealand Banking Group Ltd. (ANZ) reflect the bank's good market positions in its core markets of Australia and New Zealand, strong asset quality by international standards, and strong profitability. Also supporting the rating is the bank's well-established risk-management capability. A key risk factor moderating the rating is ANZ's reliance on wholesale funding, which can negatively affect earnings and liquidity, given the current volatility in global financial markets. Other moderating factors include the bank's moderate capitalization and limited geographic diversity by international standards. Global credit-market volatility has reduced access to wholesale funds and widened spreads. To date, ANZ has satisfactorily absorbed the effects of the global credit-market volatility, albeit at a higher cost. At half
