LONDON, Sept 17 (Reuters) - The ECB could cut its main interest rate, put its deposit rate into negative territory and offer banks a new round of ultra-cheap funding, policymaker Luc Coene said on Monday, adding Spain's borrowing costs would soar again without a support programme.
ECB Governing Council member Coene said it was "very unlikely" that the ECB would ever engage in outright quantitative easing but that the central bank had a number of other options to ease monetary policy.
"You could further lower interest rates, you can also try to extend the LTROS to some extent, you can also do some LTRO with private credit claims as collateral," he said during a seminar organised by the European Economics and Financial Centre.
Asked on charging banks to deposit cash at the ECB overnight he added: "That is certainly one of the options, that not at all excluded."
Coene is the head of the Belgian central bank, a position which brings with it a seat on the ECB's 23-member Governing Council.
The ECB's vow to buy potentially unlimited amounts of Italian and Spanish bonds if the countries admit themselves into fiscal rehab programmes has seen a dramatic reduction in the market turmoil which was threatening the euro's future.
Coene said the ECB would not lose the appetite for the purchases as it did for its Securities Markets Programme because they were now directly tied to countries submitting themselves to fiscal rehabilitation programmes.
He said the ECB would make its own decisions on whether a country was sticking to its promises.
"We could turn the purchases on and off instantly overnight," he said adding that Spain's borrowing costs were likely to jump again if it did not admit itself into a fiscal rehabilitation programme.