When Mario Draghi, chief of the European Central Bank, vowed to defend the euro last week, analysts went as far as to speculate a lowering of interest rates and bond purchases by the bank. Yet the bank disappointed yesterday, offering nothing but inaction.

Expectations for bold actions had run high after ECB President Mario Draghi on Thursday last week vowed to do "whatever it takes" to preserve the euro.

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However, the Bank yesterday only offered a glimpse of a new central bank strategy, with the actual intervention possibly weeks or months away.

Softening his rhetoric, Draghi, after keeping interest rates steady, indicated the ECB may resume buying government bonds to drive down surging Spanish and Italian borrowing costs.

At the same time, he said the ECB would only intervene in markets alongside the eurozone's bailout funds. The WSJ said this was "crucial for the ECB because only the European Financial Stability Facility and its successor, the European Stability Mechanism, can ensure binding conditionality."

But Draghi added the ECB would consider other "non-standard" measures, hinting at quantitative easing, and by noting signs of an economic recession spreading across the continent left the door open for future rate cuts.

Disappointment was thinly-veiled. In the words of the WSJ, "ECB follows words with more words", while Mark Gongloff of the Huffington Post wrote:

Another day, another central bank failure. The European Central Bank on Thursday stared a recession and financial crisis in the face and decided to do absolutely nothing about it. It was a page right out of the Federal Reserve's playbook, which on Wednesday stared a slowing economy and high unemployment in the face and decided to do absolutely nothing about it.

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However, Chris Weston, dealer at IG Markets, said "it was obviously disappointing not to get outright buying of bonds by the Fed and the ECB, but it seems they will come and in the case of the ECB, could be unlimited."

Kazuto Uchida, executive officer and general manager of global markets at Bank of Tokyo-Mitsubishi agreed, adding:

Markets were reminded of the limit to what the central bank can do for Europe's financial crisis. There is now risk of repercussions to having an excessive belief that monetary policy or central banks are 'almighty'.

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