Find out more about the origins of the greatest financial crisis in decades.
The crisis that has gripped financial markets since August 2007 represents the greatest challenge to the European Central bank in its 10-year history, ECB head Jean-Claude Trichet said Tuesday.
"In its 10-year history, the ECB has had to conduct monetary policy under particularly challenging circumstances in a number of occasions -- the global correction in equity markets after the bursting of the 'New Economy' bubble and the terrorist attacks in September 2001 are cases in point," Trichet said as he accepted the 2007 European banker of the year award.
"The emergence of the financial market tensions in August 2007 is certainly the most challenging experience to date."
Acting alone or in conjunction with other central banks, and through different procedures, the ECB has flooded money markets with funds to keep credit flowing.
Markets have been starved of liquidity since a downturn in the US housing market last year undermined the value of billions of dollars in mortgage-backed securities held by major US and European banks.
That in turn has made banks extremely reluctant to lend to one another and to businesses, prompting a credit squeeze that now threatens the broader economy.
Trichet, who was addressing officials from the city of Frankfurt and an association of journalists, insisted that the ECB had adhered to the "separation principle."
"The ECB makes a clear separation between, on the one hand, the determination of monetary policy and, on the other hand, its implementation using liquidity operations."
He said the bank's principal mission was to ensure price stability. Unlike the US Federal Reserve, which has responded to the crisis by slashing its benchmark interest rate to 2.0 percent, the ECB has taken a more cautious approach.
The ECB in fact raised its key rate a quarter of a point in July to 4.25 percent in the face of inflationary pressures.
It is expected to maintain that rate on Thursday at the next meeting of its policymakers.