ECB could cut rates again next week: Quaden

BRUSSELS (Reuters) - The European Central Bank may cut interest rates again when it meets next week, governing council member Guy Quaden said in a joint newspaper interview published on Friday.

"The ECB meets next week and another rate cut is a possibility," Quaden told Belgian business daily De Tijd in an interview also carried by its French language counterpart L'Echo.

The ECB lowered interest rates by a half-percentage point on October 8 in a historic joint cut with the central banks of the United States, Britain, Switzerland, Canada, Sweden and China.

ECB chief Jean-Claude Trichet said on Monday that the bank could cut rates again at its next meeting. Governing council member Miguel Angel Fernandez Ordonez on Thursday said a rate cut was possible at the meeting.

Quaden said the ECB's decision to cut on October 8 was possible because it had been clear that inflation risks were lessening.

"I expect that inflation will fall," he told the newspaper.

Quaden said he did not envisage the onset of a depression such as in the 1930s and believed that central banks have reacted much faster and more effectively this time.

"There will not be a great depression such as in the 1930s. We have learned lessons from the 30s. You have seen the reactions of the central banks: faster and better than in the 30s," he said.

Quaden also commented that there needed to be a fundamental rethink of the functioning and control of financial companies, encompassing regulation, accounting, ratings agencies, pay, risk behavior and the stress on short-term performance.

"It is preferable that everything is regulated on a world level. If that turns out not to be possible, the problems must be discussed and tackled on a European level," he said.

European Commission President Jose Manuel Barroso has urged the bloc to go beyond a fractured system of national financial supervisors in the face of a financial crisis that has raced across continents.

Quaden said the Belgian central bank had not produced a new growth forecast for the country, but that the Federal Planning Bureau's 2009 forecast of 1.2 percent made last month was outdated.

"Growth will be nearer to zero percent than 1 percent," he said, adding that it was likely growth would be negative in the fourth quarter of this year and the first quarter of 2009.

"A recession -- two quarters of negative growth according to a certain definition -- is not ruled out," he continued.

(Reporting by Philip Blenkinsop; editing by Patrick Graham)