91.50% chance RBA will reduce interest by .50% which knowing...

91.50% chance RBA will reduce interest by .50% which knowing RBA's conservative approach I personally highly doubt it. a .25% at worse would reduce cost of capital to all banks. Considering no bank will reduce rates as treasury has hinted at banks having no obligation to passing it on (I believe the banks shouldn't pass it on, as the ordinary person will assume the interest savings in their weekly budgets and spend more and may make them borrow funds again at a time they shouldn't be).

USA will most likely reduce rates very soon.

and So will europe.

Three major governments will cut interest rates, plus the Gov't approval, corporate debt will be much cheaper.

Libor being so high is only due to banks hoarding cash to maximise their returns and re-organise themselves. Libor went through the roof very fast, thus for every up there's a down, the harder you throw something in the sky, the quicker it will come back down! (my theory - not a scientist)

all in all I believe the market shall gain confidence in banks by mid Feb 2009, which is when BNB will announce its 2008FY final results, which is a perfect time as it would be in a very good position to establish future guidance.