A "sudden-stop" scenario regarding access to offshore funding is one of the chief vulnerabilities for banks "and, by extension, the government", Moody's Investors Service said yesterday.Moody's yesterday affirmed the Aaa long term rating for Australia.The ratings agency said that "the diversity of the economy and the strength of the financial system lead to a very low level of event risk. However, the banks are dependent on foreign funding."Even so, Moody's noted that "the country's strong banking system insulated Australia from the contagion that affected other advanced economies" during the financial crisis starting in 2008.Sticking to the implied view that banks fund the current account deficit, Moody's observed that "historically, much of the external funding has been through the Australian banking system, although this reliance has diminished in the past couple of years as domestic deposit funding has increased."Moody's said that banks and Australia's "susceptibility to event risk… has probably been reduced from earlier levels, "in part thanks to tougher liquidity rules and other supervisory measures."The outlook is for Australia's reliance on foreign funding to decrease," Moody's said, projecting "a lower level of current account deficits and, therefore, lower dependence of the economy on capital inflows."