Westpac Bank has made contingency plans in case wholesale funding markets dry up due to global jitters.

The health of 15 of the world’s largest financial institutions have again been called into question because of a ratings downgrade by Moody’s.

Bank of America, JPMorgan Chase, Goldman Sachs, Barclays, Deutsche Bank and HSBC were among those to be downgraded.

Moody’s said the long term prospects for their profitability and growth were shrinking, and said it was especially concerned about banks with significant financial markets businesses.

Westpac chief executive Gail Kelly said the situation in Europe was concerning, but it wasn’t a surprise.

“We planned for greater downgrades, we planned for continued volatility, we planned for, at various times, markets simply being unavailable,” Ms Kelly told reporters on Friday.

“That’s why all the good, hard work we’ve done over the past three or four years is standing us in such good stead now with very high levels of liquidity, which really give us an enormous sense of buffer as well as a very strong retail deposit activity which is well more than covering the lending growth here.”

Australian banks are also less reliant on overseas fund markets due to soft loan demand and higher levels of saving, Ms Kelly said.

“We are meeting (loan) demand, it’s simply that demand isn’t there because of the caution that exists at the moment,” she said.

“We can stand back and watch the activities in Europe and don’t need to participate in funding activities there until we find the right window of opportunity.”

The Westpac boss said Australia’s banking sector was much stronger following the financial crisis.

Retail deposit growth was outstripping lending growth, and a recent lowering of deposit rates was a good thing, Ms Kelly said.

“I’m hoping they’re able to remain at a slightly lower level than they were running at four or five weeks ago,” she said.