All three major credit ratings agencies now have an AAA rating on the long-term foreign currency debt of the Australian Government.Fitch Ratings yesterday lifted its sovereign credit rating to AAA from AA+.Among a list of economic parameters cited by Fitch was Australia's low ratio of general government debt to GDP, a ratio of 26.3 per cent. Fitch said that the median ratio for other AAA-rated sovereigns was 55.7 per cent.Fitch wrote in its media release regarding the upgrade that "Australian authorities have the flexibility to run strong counter-cyclical fiscal and monetary policies during both economic downturns and upturns. These factors have helped Australia weather a number of externally driven shocks over the past two decades."On the other hand, Fitch wrote, Australia was "relatively sensitive to external financing shocks when compared to AAA peers" in part due to the funding profile of the banking sector.Fitch said that Australia's banks were, and still are, "heavily reliant on external debt [and] faced difficulties accessing the international wholesale funding market in late 2008/2009."The firm made no mention of the present difficulties, such as they are, that banks face raising long-term debt, at least on terms the banks view as tolerable.In an interview, Art Woo, a director in Fitch's sovereign ratings group in Hong Kong, said that "Australia does have a large external debt position, which is saying that investment is higher than savings, and so there is a need to import capital from abroad."And importing the capital from abroad is usually conducted via the banking sector."If there is stress in the banking sector in a worst case - and the worst case is not our base case - then stress in the banking sector could radiate... [and affect] the sovereign."