Australian RBA makes surprise cut.

smasha

The Reserve Bank has stunned financial markets by announcing a full-percentage point cut - double what analysts had tipped - saying financial markets had taken a "significant turn for the worse.''

Australia's official lending rate was lowered for a second consecutive month, although it is unclear how much of the 100 basis-point cut will be passed on to mortgage-holders and other borrowers as banks struggle to raise funds in overseas money markets.

Now just watch the banks keep it all for themselves!

TomGrey

Banks that 'just keep it for themselves' and don't make more loans, will still be vulnerable in the near future.

The fear of low interest rates is too much inflation, but with global DEFLATION as a fear, low interest rates everywhere is the right monetary policy. But it might not, and probably isn't, enough.

National central banks need to be willing to start loaning cash directly to companies, to avoid the clogged banking problems.