BRUSSELS (Reuters) - European Central Bank President Mario Draghi signaled it was willing to take further action to prop up the euro zone economy in a speech to the EU parliament on Thursday, saying risks had grown and that the ECB was aware of growing banking problems.
Highlighting action the ECB took on Wednesday with other major central banks to provide dollar liquidity that was reminiscent of the 2008 financial crisis, Draghi said the bank would ensure inflation did not undershoot its target as well as exceed it.
Markets read that and the warning of growing downside risks to the economic outlook as pointing to a second cut in official interest rates in as many months at next week's ECB policy meeting, pushing the euro to a session low.

"The ECB's monetary policy is constantly guided by the goal of maintaining price stability in the euro area over the medium term -- and this applies to price stability in both directions," Draghi said.

"Downside risks to the economic outlook have increased."

ECB Draghi: To Ensure Price Stability "In Either Direction"

FRANKFURT (MNI) - The European Central Bank's monetary policy is geared towards ensuring price stability, whether that means guarding against inflation or deflation, European Central Bank President Mario Draghi said on Thursday