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ECB President Mario Draghi indicated any intervention would come at the earliest in September once governments had activated their rescue funds to buy bonds, and the countries at risk had requested assistance and accepted tough conditions. The absence of immediate action, the conditional nature of Thursday's decision and the reservations of Jens Weidmann, head of Germany's influential Bundesbank, the ECB's biggest shareholder, spooked investors.
"The Governing Council, within its mandate to maintain price stability over the medium term and in observance of its independence in determining monetary policy, may undertake outright open market operations of a size adequate to reach its objective", Draghi told a news conference after the central bank's monthly meeting.
The ECB would also consider other "non-standard" measures to rein in the eurozone crisis, he said, hinting it might move to quantitative easing - or printing money - by not withdrawing all the money it creates to buy bonds.
Unlike the US Federal Reserve and the Bank of England, which have engaged in QE since 2008 by creating money to buy securities, the ECB has so far "sterilised" all its purchases by taking in an equivalent amount in interest-bearing deposits.