In a bold move to avert contagion, Australia’s Reserve Bank on Tuesday responded with alacrity to the deepening crisis in global finance when it chopped one percentage point off the country’s benchmark cash rate.

The subtext of the cut, the most aggressive in 16 years, was that the central bank was prepared to do whatever was necessary to improve the lot of its banking industry, including forcing down borrowing costs to unblock capital flows that will get its banks lending again.