Bank lending will end the credit crisis

The head of the International Monetary Fund (IMF) says he hopes the actions taken by governments will be powerful enough to persuade banks to start lending again, and that he IMF is ready to lend to any country that needs help.
Speaking at the G20 meeting in Washington, Dominique Strauss-Kahn says this would bring an end to the credit crunch.
But he has warned that the global financial system is near to meltdown, saying the IMF has been calling for co-ordinated action on the crisis for some time.
Mr Strauss-Kahn says the crisis is not limited to advanced economies and the IMF is ready to lend to any country that needs help.
"The fund has asked for weeks, if not for months, for more co-ordination in action, arguing that in such a crisis that it was impossible to look for domestic solution," he said.
"Action taken in some countries without coordination with other countries can hurt more than it helps."
The G20 group of leading economies has agreed to coordinate efforts to respond to financial turmoil in world markets.
The group says it will use all means available to ensure the stability of the global financial system.
In a joint statement the group emphasised the need for nations to communicate to ensure that benefits to one country do not destabilise other economies.

Global wave of rate cuts could not save the stockmarkets

The dramatic Australian official interest rate cut this week by the RBA was followed by smaller cuts by central bank around teh World, but has had little effect in confidence in the world's stock markets as shares have repeatedly fallen all week to make this week the worst for 21 years on Australian Markets.
Mr Mortgage said that the interest rate reductions would not solve the banks liquidity problems or the trust between banks that they will be repaid on funds advanced.
With so many failing institutions in the US and Europe the problem will take to work through.

PM supports banks not passing on the full rate cut

Kevin Rudd supports tha banks not passing on the full cash rate reduction of 1% by the RBA yesterday.
According to Mr Mortgage there was an expectation by the RBA that the banks would not be in a position to pass on the full reduction, and that in his opinion was the reason for the anticipated 0.5% reduction being doubled to a 1.0% rate cut. So the mortgage belt should as a whole be well pleased with the outcome.
Where this will be enough to kickstart home buyers into making offers on homes in the near term remains to be seen.
I suspect that further cuts will be required to give new home buyers the confidence to move forward in this he feels.
Mr Rudd says he supports the banks' decisions this time, he has also urged them to pass on further cuts if conditions improve.
"As financial markets stabilise we expect the banks also to pass through the rest of the interest rates over time."
However, Mr Rudd conceded that his defence of the banks' position not to pass on the full cut to borrowers may be unpopular.
"My job, and sometimes it's going to be very unpopular, is to argue in defence of the stability of the Australian banking system," he said.
"That means making sure we get these decisions right."
Mr Rudd said "despite worsening global conditions there are strong grounds for Australia to remain optimistic about its economy but there must be a balance between a strong banking system and relief for borrowers."