Mario Draghi’s plan begins to take shape

Ever since his appointment was announced months ago, ECB President Mario Draghi has been under pressure to print money to help ease the euro zone debt crisis. Draghi has stoutly resisted saying his job is to watch over the euro zone banking system (although the ECB has bought some bonds of troubled countries like Italy and Spain)

Europe's banks have had tremendous pressure put on them as many held Greek and Italian debt and are still struggling with the fall-out from the crash of 2008. This is especially true in Spain.

Today the ECB made 3-year loans available to banks at a bargain interest rate of 1 percent. The retail banks took advantage, buying round 489 billion euros worth ($638 billion). How they will use the money is the subject of some speculation because the names of the banks that borrowed from the ECB are not known yet.

Some of them located in the debt ridden countries at the euro zone's edge – like Italy and Spain – might use the cheap money to buy their own sovereign debt possibly keeping yields down.

Some might hoard the money to shore up their shaky balance sheets.

Others may even do what banks used to do: lend the money to businesses and private customers to keep the economy working.

The markets in London rose initially on the news and have now fallen back. The always interesting Larry Elliott says there is not enough here to get excited about.

For those who can read more detailed financial analysis here is a link to a Morgan Stanley report on Europe's banks and their need to continue to pay down their own debts i.e. "de-leverage."