Australian banks need to raise about $100 billion a year on wholesale markets,about half of that internationally.

European investors are significant buyers of this debt,and residential mortgage-backed securities used by regional banks and non-bank lenders.

In recent weeks,lenders have tapped securisiation markets to raise money at competitive rates,including a $2.5 billion issue from Westpac and a $750 million raising from Resimac that included an overseas component.

The pricing of these deals has been competitive with spreads narrowing,and Mr Wiblin said this trend could continue.

"Given that the ECB has introduced negative rates,you could see those rates moving in even further,"Mr Wiblin said.

Any fall in funding costs would likely benefit major and regional banks,which have also been competing for deposits in recent months.

The trend comes amid a''credit boom''that is allowing Australian companies to sell debt at historically low levels.

The cost of issuing new bonds for big Australian companies is already at its lowest level in years,and Deutsche Bank analyst Anthony Ip said the ECB's moves could prolong the trend.

''The actions of the ECB last night in cutting rates makes yield products like credit more attractive to investors,''he said.

A key gauge of bank funding costs,credit default swaps,are trading at their lowest levels in several years and tightened further on Friday morning.

''We have not seen anything this tight since before the global financial crisis,''Mr Ip said.