* Trichet talks of hope that economy is at turning point
* Stark says ECB can cut rates further
* Warns cutting rates too low risks aggravating crisis
* Idea of credit easing raises questions
* Nowotny: euro entry rules should not be changed
(adds Trichet quotes, detail)
By Andreas Framke and Krista Hughes
LUXEMBOURG/BASEL, March 9 (Reuters) - The president of the European Central Bank said the global economy could be bottoming as another top policymaker signalled the bank's recent record run of interest rate cuts may be nearing an end.
The head of the ECB, Jean-Claude Trichet, on Monday said the global economy was still slowing but that there were signs that a turning-point may be near.
"We are identifying a number of elements in the global economy ... that are expansionary," Trichet said after chairing talks at a Bank for International Settlements meeting. "We have a number of elements that are suggesting that we are approaching the moment where we would have a pickup."
He said a return of confidence was the key to getting the economy back on its feet and that financial markets were failing to see the benefits of central bank interest rate cuts, billions of dollars and euros worth of government stimulus measures and falls in commodity and oil prices.
Juergen Stark, a colleague of Trichet's on the ECB's six-member Executive board, said the ECB still had room to cut interest rates further.
However he warned that it had to be careful not to slash rates too low, bolstering the growing view that the ECB is now nearing the end of its recent record of cuts which has seen it slash by 2.75 percentage points since October.
"Of course ... there remains room for further manoeuvre on money policy. But this will not fundamentally solve the problems which have caused the financial crisis," Stark said.
"The contrary could be the case... too low rates might in fact aggravate them," he added, saying it could remove the incentive for banks to clean up balance sheets and risked crimping money markets.
The ECB cut euro zone interest rates to a all-time record low of 1.5 percent last week and policymakers have since come out and suggested that they are not yet finished.
Central banks around the world have slashed rates to record lows to fight the crisis. The latest Reuters poll shows analysts are now increasingly convinced the ECB will cut euro zone rates to 1.0 percent or lower before the middle of the year.
Stark added that 2009 would be a very difficult year for the euro zone. "In our view the economic outlook remains surrounded by uncertainty," he said. "We in the ECB Governing Council anticipated in our interest rate decisions that there will be bad news to come for the first quarter of 2009."
Trichet noted that international institutions expected an economic contraction this year in industrialised nations and flat growth globally, before a slow pick-up in 2010.
UNCOVENTIONAL TACTICS
Speculation has also been growing that as the ECB runs out of interest rate ammunition, it will have to switch to unconventional tactics like buying up bonds, something already being pursued by the Fed and Bank of England.
But Stark said such moves raised potential problems. "Central bank measures aimed at easing credit conditions have not been met with undivided enthusiasm. Commentators have worried about a host of issues," he said.
"Will the expansion of central bank balance sheets ultimately lead to inflation? As central banks are seen as switching attention from implementing monetary policy by steering short-term interest rates to targeting the composition and size of their balance sheets, have they lost their instrument... Have they become intransparent and unpredictable?"
Trichet said central bankers in Basel had discussed the topic. "I would say that it was a very, very important exchange of views. We are not in the same situation, we have not the same structure of our economies," he said.
He also issued a call to arms against protectionism. "All my colleagues and myself are calling for open trade... We would all say that we have to fight against financial protectionism, financial mercantilism which would be a temptation but that we have to strongly oppose."
EASTERN CHANGE?
ECB Governing Council Ewald Notwotny was non-committal when asked by reporters whether the ECB would cut interest rates again in April. "We can't say that yet... we will act appropriately," he said on the sidelines of the BIS meeting.
He also said there was no need to jump to provide extra liquidity, open up ECB rules on collateral or widen the range of FX swaps to help hard-hit eastern European countries.
The Austrian central bank chief also played down the idea of speeding up the process for joining the euro.
Stark added that central banks could not cure the world's financial ills on the their own, saying that governments needed to be prepared to do more if necessary.
"Central banks can alleviate liquidity risks. But they cannot address the perceived problems that impair the financial system," he said.
"The commitments (by governments) to provide support are already substantial... in case these measures prove to be insufficient, they need to be complemented by further actions to address problems on the asset side of banks' balance sheets."
(reporting by Krista Hughes and Andreas Framke, writing by Marc Jones in Frankfurt; Editing by Ron Askew and Andy Bruce)