Key ECB steps to combat Europe's debt crisis

Some of the key steps the European Central Bank has taken to ease Europe's financial crisis and provide a spark to the weak economy include: 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 (EURO)489 billion ($608.17 billion) and in February 800 banks borrowed (EURO)530 billion. The more than (EURO)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.

In another potential sop to the Bundesbank, Draghi said all bond purchases would be "sterilised" by taking in an equivalent amount in deposits from banks.

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