Mario Draghi said the European Central Bank (ECB) might start broad-based asset purchases if the inflation outlook worsens as he prepares the ground for one of the most radical policies in the ECB's history.

"The objective here would not be to defend the current stance, but rather to increase meaningfully the degree of monetary accommodation," the ECB president said in a speech in Amsterdam today. "The Governing Council is committed—unanimously—to using both unconventional and conventional instruments to deal effectively with the risks of a too-prolonged period of low inflation."

Draghi's comments are his most explicit so far on what would prompt action similar to the quantitative easing programs at the U.S. Federal Reserve and Bank of England. Inflation data next week will give further clues as to whether consumer-price gains are accelerating as the economy recovers or if the euro area is teetering close to deflation.