The European Central Bank said it would ramp up bond purchases to help support the economy on Thursday, joining policymakers around the world in a rush to contain the fallout from the coronavirus pandemic.
But the central bank, which also took steps to boost liquidity, did not push interest rates deeper into negative territory, a move that some investors had been expecting.
Interest rates are already at historic lows in Europe, and economists had expressed concern that trimming them further would be insufficient to fight an economic shock. Still, the decision to keep rates steady fed a freefall in European stocks on Thursday, with Germany's DAX and France's CAC 40 extending losses to 7%.
The announcement, which was made following a scheduled meeting in Frankfurt, comes after the US Federal Reserve and the Bank of England both slashed interest rates by half a percentage point in emergency sessions, citing the risks the coronavirus poses to economic activity.
The moves have done little to placate nervous investors, who have kept selling risky assets at a rapid clip as panic grows.