European Central Bank (ECB) President Mario Draghi announced the launch of an open-ended, expanded monthly 60 billion euro ($70 billion) private and public bond-buying program on Thursday. The long-anticipated introduction of euro zone government bond purchases, which could amount to as much as a trillion euros, will mean the ECB will join the U.S. Federal Reserve, Bank of England and Bank of Japan in launching a quantitative easing (QE) scheme. The program will be open-ended, lasting until at least 2016, Draghi told reporters at his regular media conference on Thursday, and will start in March this year. The hope is that it will boost the region's painfully low inflation rate, which came in at an annual minus 0.2 percent in December. Explaining the ECB's decision, Draghi said: "Inflation dynamics have continued to be weaker than expected. While the sharp fall in oil prices over recent months remains the dominant factor driving current headline inflation, the potential for second-round effects on wage and price-setting has increased and could adversely affect medium-term price developments."

The size of the program was bigger than the 50 billion euro per month rumored prior to Draghi's announcement. Read MoreLive blog: Markets cheer European QE "European QE is set to start with a bang rather a whimper, a fact that will be well received by investors," said Nancy Curtin, CIO of Close Brothers Asset Management, in a research note after Draghi's announcement.

"The euro zone was in need of shock-and-awe tactics from the ECB to combat the prospect of a prolonged period of deflation, and Draghi has finally delivered on his promise to do 'whatever it takes'." The ECB will purchase euro-denominated investment-grade securities only. The debt of countries like Greece, which are subject to international bailout programs, will be subject to "additional eligibility criteria," Draghi said.

Debt that is trading with a negative yield will also be eligible for the program. Draghi also said that in the event of a sovereign restructuring or default, public and private bondholders would be treated on equal terms. Twenty percent of the additional purchases will be subject to risk-sharing arrangements, designed to limit the amount of risk the ECB takes on to its balance books. The majority of risk will remain with euro zone national central banks.

No more than 25 percent of each debt issue will be purchased. The maturities of the debt purchases will range between two and 30 years. The euro slid against both the sterling and the U.S. dollar after Draghi's announcement. Europe's stock markets staged a small rally on the news of the announcement, while 10-year yields on a range of European sovereign debt fell to record lows.