European Central Bank President Mario Draghi says the bank is ready to provide another round of cheap long-term loans to banks if necessary, in a move that would keep borrowing rates low and support the fragile recovery.

Draghi on Monday told European Parliament lawmakers the bloc's economic recovery still "needs to be firmly established."

He said that in addition to keeping its benchmark interest rate low, the ECB is also prepared to offer a new round of cheap LTRO loans for banks, "if needed."

The previous two so-called Long Term Refinancing Operations helped ease Europe's debt crisis by injecting almost 1 trillion euros ($1.3 trillion) into the financial system. That reduced fears that banks might collapse and bring down the public finances of weak states like Spain or Italy.