The Governing Council of the European Central Bank may continue to be non-conventional in boosting bank lending, central bank President Jean-Claude Trichet said in an interview with the Wall Street Journal.

It's pretty possible that we would continue to be non-conventional through the channel of bank financing, Trichet told the Journal. This channel remains for us essential.

Trichet insisted Eurozone banks on passing ECB interest rate cut and liquidity supply on to the real economy. He said, If I am shipping this message, it is because we trust that this is not yet entirely done. He added that the central bank is not blaming the region's banks, but it is encouraging them to do their job.

ECB chief noted that the reason for concentrating bold non-standard measures on the commercial bank channel was based on the fact that 70% of euro area's financing comes from commercial banks and 30% through securities other than stocks.

With regard to the future interest rates, Trichet said the central bank could lower its interest rate on main refinancing operations, currently at a record low of 1.5%, further.

According to Trichet, interest rates close to zero have drawbacks and are inappropriate in the context of Europe. The Federal Reserve and Bank of Japan have lowered their policy rates to near zero and the Bank of England has reduced it to 0.5%. He added that interest rates in the market, which are lower in Europe than in the U.S. are counted.

The ECB has so far refrained from purchasing government assets, which is now a policy of central banks including the Fed and the Bank of England. Trichet noted that ECB's collateral framework has been very supportive since the beginning of the crisis in the case of private papers and Europe's corporate securities markets behaved properly in terms of volume since January.

As regards possible outright purchases of securities in general I said that we are not pre-committed for any new decisions, Trichet said.

Speaking about economic recovery in Europe in 2010, Trichet said there would be a progressive gradual recovery. It's neither an optimistic vision nor a pessimistic vision. It's the present, realistic vision, he said asserting that 2009 will be a very, very difficult year.

Trichet said the criticism that European governments have not done enough, in terms of fiscal stimulus, is not justifiable. He said Europe and the U.S should now, as efficiently and rapidly as possible, do what has been decided. Nothing will really work until the financial sector is back on track and ready to lend on a sustainable basis.

Elsewhere, Commerzbank AG lowered its forecasts for Eurozone. The 16-nation Eurozone is now seen shrinking 4.5% this year versus the earlier forecast of 2.5%-3% contraction. Other main Eurozone economies, France, Italy and Spain are expected to shrink 3.5%, 4.5%, 4.6%, respectively this year.

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