FRANKFURT, Germany – European Central Bank chief Mario Draghi has been in the job since November 2011. Here are some of the key steps the bank has taken to ease Europe's financial crisis and provide a spark to the weak economy since he took office:
UNLIMITED BOND BUYS: The ECB announced Sept. 6 that it is willing to purchase the bonds of heavily indebted countries and lower their borrowing costs — if they first ask for help from the eurozone bailout fund.
Bond purchases would drive bond prices up and interest yields down in the open market. Governments could then take advantage of those lower yields when they sell bonds to pay off old bonds that are coming due.
The ECB's plans have already helped lower borrowing costs in bond markets, at least temporarily, for Spain and Italy. High borrowing costs were threatening to push those countries into a financial collapse that could break apart the shared European currency.
One caveat: a country that wants help must first apply for a bailout to the eurozone rescue fund, the European Stability Mechanism — and agree to take specific steps to reduce its deficit.
So far, the leading candidate — Spain — has been reluctant to do that because Prime Minister Mariano Rajoy does not want economic policy dictated by outsiders.
The ECB says that by lowering borrowing costs, it will bring market interest rates more in line with its low benchmark rate. That means it can say the action falls within the bank's legal mandate to carry out monetary and interest rate policy. It's forbidden to use its monetary powers to support government finances directly.
CHEAP LOANS TO BANKS: The ECB made an unlimited amount of cheap, three-year loans available to banks on two occasions since late last year. In December, 523 banks borrowed €489 billion ($608.17 billion) and in February 800 banks borrowed €530 billion. The more than €1 trillion action helped to relieve stress on banks, especially those that were having difficulty borrowing from other banks.
The long duration of the loans gave banks security that they would have the money they needed until 2015. Another key feature was looser collateral requirements that let banks post different types of securities in return for loans. That gave them more chances to obtain money — but increased the ECB's risk of losses as it takes on shakier securities.
The loans provided indirect relief to heavily indebted countries that were facing high borrowing costs in bond markets. Some banks took the cheap money and started buying higher-yielding government bonds with it. That raised bond prices and lowered bond interest rates, which equates to lower borrowing costs for struggling countries, such as Spain and Italy.
LOWER INTEREST RATES: The ECB has cut its key interest rate by a quarter percentage point three times since Draghi become president. The so-called main refinancing rate is now at a record low of 0.75 percent. That is what the bank charges on credit it offers to eurozone banks. The rate influences interest rates on the loans banks provide to each other, businesses and consumers.
The ECB has lowered the rate it pays banks for depositing their money with the ECB overnight to zero. That increases the incentive for banks to lend money to each other or to businesses rather than park it with the ECB.
RESERVE CUT: In December, the ECB cut the amount that banks must keep on reserve with it, from 2 percent of their assets to 1 percent. That freed some €100 billion for the banks to use elsewhere.