The Dow jumped more than 250 points in morning trading after Draghi said in no uncertain terms that member nations' commitment to the euro currency, whose future has been in doubt as countries -- especially Greece -- consider a return to heritage currencies, is "irreversible."
At the Global Investment Conference in London, Draghi suggested that the bank could be gearing up to use its substantial buying power to strong-arm bond yields into submission.
Higher rates for riskier countries could “hamper the functioning of the monetary policy transmission channel,” he said. But keeping borrowing costs in check for struggling Spain and
"Believe me, it will be enough," Draghi said of potential action from the ECB, which so far has only sporadically wielded its bond-buying clout.
Spanish and Italian bond yields plunged on his statements. The euro strengthened against the dollar, rising 1.17%. By late morning in New York, the Dow was still up 1.41%, or 178 points, to 12,854.
But some analysts said that ECB policies to stall Spain, Portugal and Greece from defaulting on their debt may not prevent a European recession from lasting through next year.
At the conference, a six-week run of business summits hosted by British Cabinet ministers on the eve of the
Banks, King said, aren't entirely to blame for the troubles in their sector, despite their "bad behavior."
"This was a crisis which emanated from major mistakes in macroeconomic policy around the world, and fundamentally the inability to successfully coordinate macroeconomic policy so that globally you wouldn't get the imbalances, the capital flows, that created the difficulties in the banking system," he said.