The European Central Bank President Mario Draghi on Thursday said the bank is prepared to take whatever measures needed to preserve the euro.

"Within our mandate, the ECB is ready to do whatever it takes to preserve the euro," he told an investment conference in London. "And believe me, it will be enough."

The central bank chief's comments boosted markets and the euro. The Spanish 10-year yield dropped more than 30 points to around 6.82 percent, after climbing to a record 7.60 percent earlier in the week.

The euro advanced to a 1-week high of 1.2288 against the dollar following Draghi's comments, a whopping 140-pips rally.

"To the extent that the size of these sovereign premia hamper the functioning of the monetary policy transmission channel, they come within our mandate," Draghi added.

Today's remarks has raised hopes of more action to ease debt crisis in Italy and Spain at the next rate-setting meeting on August 2. The borrowing costs of Spain this week exceeded the 7 percent, which is considered as unsustainable.

Early July, the ECB cut its key rate below 1 percent for the first time in its history. That 25 basis point reduction was the first since December and third since Draghi became the ECB President in November.

Draghi said over the weekend that the central bank is very open and it has no taboos on doing more to ease the economy. His latest comments adds to other ECB policymakers hints of radical action from the central bank.

In an interview to Bloomberg on Wednesday, Governing Council member Ewald Nowotny said there are arguments in favor of grant banking license to the permanent bailout fund. A banking license will give the European Stability Mechanism an access to ECB lending.

Meanwhile, Bank of England Governor Mervyn King, speaking at the same event, said restoring confidence in the financial system is a challenge. Regulators should ensure that financial system serves the real economy, he added.