The European Central Bank (ECB) cut interest rates and will start buying assets, easing the flow of funding for the region's economy while holding back for now on larger-scale action.

The ECB "will purchase a broad portfolio of simple and transparent securities," President Mario Draghi said at a press conference in Frankfurt today. While the measures announced today will have a "sizable" impact on the balance sheet, "some of our council were in favor of doing more than presented," he said. The euro dropped below US$1.30 for the first time since July 2013.

In committing cash to the market for asset-backed securities (ABS), Draghi is making good on his pledge to help rekindle an asset class that can funnel loans to the real economy and ease funding conditions for banks. While the size of the plan wasn't given, it probably doesn't represent the kind of quantitative easing that could directly fend off the threat of deflation.