ECB surprises with rate cuts

President of European Central Bank Mario Draghi talks during a news conference in Frankfurt, Germany, Thursday, on Sept. 4, 2014.

AP Photo/Michael Probst

FRANKFURT, Germany - The European Central Bank says it will start a new stimulus program that involves buying financial assets to salvage a weak economic recovery.

In a press conference after the ECB said it had cut two key rates, President Mario Draghi said Thursday the bank would start purchases asset-backed securities and covered bonds in October.

Asset-backed securities are based on investments such as loans to companies and mortgages. Buying them would stimulate the market for such bonds and for banks to make the loans that make up the assets.

Thursday's news pushed the euro down to $1.2995, its first time below $1.30 since July 2013.