European Central Bank President Mario Draghi flagged the central bank's readiness to act, as recent signs of stabilization in the Euro zone have proved that its interest rates are a more effective tool again.

He said this during a farewell conference for Bank of Israel Governor Stanley Fischer in Jerusalem. Draghi said that ECB could take numerous measures when needed.

He added that ECB stood "ready to act". Draghi said in a speech, "Monetary policy has regained steering capacity, which had become lost for large parts of the euro area in mid-2012. This is an important positive development".

Draghi said that lower level of interest rates was not a challenge for them to deliver their objective of price stability. He added that measures like standard interest rate policy and non-standard measures can be deployed if circumstances demand.

He said that these measures will be looked with an open mind by them as they are highly effective in institutional set up that fall within their mandate.

A senior ECB official said on Monday that common banking supervision will begin after several months than expected. Common banking supervision is under the auspices of the European Central Bank. As per current plans, the common supervision will begin in the second half of next year.