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Only a couple of weeks back, Christine Lagarde was focused on the wonky workaday jobs of running the European Central Bank.

Abruptly, the stakes are a great deal bigger now, as Ms. Lagarde, who turned the E.C.B.’s president in November, confronts a widening disaster. The swift unfold of the coronavirus in Europe has pushed the eurozone’s currently wobbly financial system toward economic downturn, and when she speaks on Thursday, Ms. Lagarde will be less than powerful strain to take motion.

The stress to send a impressive sign rose Wednesday just after the Bank of England became the newest main central financial institution to announce a broad deal of stimulus actions.

But there is one essential difficulty. The European Central Bank has been in practically nonstop crisis manner due to the fact 2008, and it has few cards left to play.

It simply cannot, for occasion, observe the Federal Reserve and Financial institution of England in slashing curiosity fees. Both equally reduce their key premiums by 50 % a proportion level, a significant move. The E.C.B.’s principal curiosity charge, the one particular it charges commercial banks for limited-time period financial loans, is by now zero.

Ms. Lagarde’s reliability, a central banker’s stock in trade, hangs on how she handles the disaster with the constrained methods at her disposal. The load on her may possibly be specifically significant simply because she is the central bank’s first feminine president.

Ms. Lagarde is no stranger to crises. As taking care of director of the International Financial Fund, she was deeply involved in the eurozone rescue prepare in reaction to the Greek financial debt meltdown in 2010. But she experienced no experience as a central banker and, unlike her predecessor, Mario Draghi, does not have a doctorate in economics.

What Ms. Lagarde states at a news meeting Thursday might be just as significant as what the European Central Bank’s Governing Council does when it satisfies beforehand to discuss monetary coverage. Ms. Lagarde have to allay fears that the central bank is out of ammo and powerless to tranquil economic marketplaces.

That will not be easy. When the Fed slash its benchmark level by .5 share points past week, the current market rally afterward lasted all of 15 minutes. The European Central Lender has a lot much less home to maneuver than its American counterpart, and the crisis has only developed worse given that the Fed acted.

Here’s a glance at some of Ms. Lagarde’s restricted choices.

The European Central Bank is greatly anticipated to reduce the rate it rates banks to park funds in its digital vaults. The price is by now destructive .5 percent, a de facto penalty on deposits that is supposed to inspire commercial banking institutions to lend their dollars as a substitute of hoarding it.

The Governing Council will almost certainly minimize the rate to minus .6 %. A even bigger minimize is feasible, but any move will not have an affect on the cost of funds that much. The major reason would be to elevate economic industry morale and present that the central lender is on the situation.

Considering the fact that 2016, with a transient intermission past calendar year, the European Central Lender has been purchasing government and corporate bonds on the open market place as a way of increasing desire, pushing down current market interest prices, and producing it much less expensive for governments and businesses to borrow income.

On Thursday, the central financial institution may well announce that it is increasing the dimensions of the buys, which amount to 20 billion euros, or $23 billion, every thirty day period.

1 dilemma is that the central financial institution has previously acquired so quite a few bonds that supply is jogging reduced. Florian Hense, an economist at Berenberg Bank, indicates that the central lender could clear up that problem by increasing its self-imposed limits on how a great deal of a presented bond challenge that it buys, and tilting its purchases towards corporate bonds, which are much more abundant.

The central lender is also commonly envisioned to develop an existing method that lets industrial banks to borrow freshly created income at a negative curiosity amount, if they lend the funds to eurozone organizations. The central financial institution could tailor the plan so that the income flows to compact firms like restaurants, hotels or outlets that are struggling the most as Europeans steer clear of leaving their households.

The Lender of England took that move Wednesday, introducing a method that presents business banking companies with incentives to lend to little and medium-sizing enterprises.

“None of these financial measures will prevent the spread of the virus,” Mr. Hense mentioned in a be aware to customers Tuesday. “But they are among the the greatest actions to prevent the financial hurt getting even additional extreme.”

The European Central Financial institution could use its electricity more than lender regulation to quickly reduce limitations on capital — how substantially of banks’ have revenue vs. borrowed income they are required to use when doing enterprise. That would give business banking institutions extra leeway to problem loans.

The Financial institution of England adopted this method Wednesday, permitting British financial institutions to deploy funds they are expected to retain on hand for emergencies.

Of class, the explanation the restrictions on cash exist is to prevent banking companies from having also substantially risk and getting into trouble in a disaster. Which is a possibility value having, argues Ignazio Angeloni, a former superior-ranking formal at the European Central Financial institution.

“Normally, supervisory forbearance is undesirable,” he wrote on the web-site of OMFIF, a analysis firm. “But this is not a regular circumstance.”

There is a remote chance that the European Central Bank will surprise markets with some new evaluate. For illustration, the lender could deploy so-termed helicopter dollars. It could print money and distribute it straight to Europeans to avert a depression. Such a shocking departure from precedent is really unlikely except if the problem will get considerably even worse.

A faction on the central bank’s Governing Council argues that financial coverage has presently long gone also far, that a ten years of quite low-priced money has fueled asset bubbles and set the phase for a monetary crisis. Some customers of the council may well resist taking even more action until it is clearer how prevalent the financial harm from the coronavirus will be.

Accomplishing nothing is most likely not a real looking choice. If Ms. Lagarde appears Thursday and states only that the European Central Lender is monitoring the scenario carefully and will announce policy moves when it fulfills yet again at the conclude of April, the disappointment in economic markets could be profound.

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