European Central Bank President Mario Draghi said on Friday that the bank had plenty of instruments at its disposal to push meager euro zone inflation levels higher and was both determined and willing to act.

His comments at the World Economic Forum in Davos came a day after the ECB surprised markets by signaling a readiness to pursue further monetary easing at its next policy-setting meeting in March.

Sharp falls in the price of oil, slowing growth in China and steep drops in financial markets have raised new questions about the strength of Europe's economic recovery and the ECB's ability to steer inflation back up to its target of close to but just below two%.

"We have plenty of instruments and especially we have the determination and willingness and capacity of the Governing Council to act and deploy these instruments," Draghi said.

Speaking on a later panel, Draghi's colleague on the ECB board, Benoit Coeure defended the bank's policies and communications strategy against criticism from former Bundesbank president Axel Weber, now chairman of Swiss bank UBS.

Coeure said the ECB's quantitative easing program was working, pointing to a "tremendous improvement" in the euro zone's capital markets, and what he called an 80 basis point reduction in average funding costs for companies since the launch of the scheme.

Weber, who resigned as Bundesbank president in protest at the more modest bond-buying program of Draghi's predecessor Jean-Claude Trichet, responded: "We understand that there may be no limit to what the ECB is willing to do but there's a very clear limit to what the ECB can and will achieve."

"The problem is that monetary policy has largely run its course," Weber said.