By Tom Fairless
European Central Bank President Christine Lagarde said late Monday that the bank is ready to act to support the eurozone economy against the impact of the coronavirus, a shift in tone that suggests mounting concern in Frankfurt over the widening economic fallout.
In a statement published around 10:30 pm local time, Ms. Lagarde said the fast-spreading virus "creates risk for the economic outlook and the functioning of financial markets."
"The ECB is closely monitoring developments... We stand ready to take appropriate and targeted measures as necessary and commensurate with the underlying risks."
The message suggests the ECB may be preparing tailored measures to support stressed financial institutions or other businesses.
It reinforces and clarifies comments earlier Monday by ECB Vice President Luis de Guindos, who indicated in a speech in London that the bank could cut interest rates or buy assets to support the region's economy.
Mr. de Guindos warned that the spread of the virus could hurt the eurozone's exports to China, a major overseas market, while disrupting businesses' supply chains and curbing demand for services in Europe.
"We remain vigilant and will closely monitor all incoming data," Mr. de Guindos said. "The Governing Council stands ready to adjust all its instruments, as appropriate, to ensure that inflation moves toward its aim in a sustained manner."
Investors are watching closely for how the ECB will respond to an infection that is spreading rapidly through a region already buffeted by trade wars, geopolitical tensions and messy negotiations around Brexit. Stock market indexes in Italy and Germany, two of the nations most affected, have fallen around 15% over the past two weeks, with Italy's blue-chip index trading more than 3% lower earlier on Monday.
Mr. de Guindos's comments echo Federal Reserve Chairman Jerome Powell, who signaled on Friday that the U.S. central bank was prepared to cut interest rates to cushion the economy against the effects of the virus.
Unlike the Fed, the ECB has little room to cut interest rates because its key rate is already below zero, at minus 0.5%. The ECB also restarted a controversial bond-buying program last September in an effort to stimulate the region's weak economy.
The euro jumped against the dollar in recent days, partly reflecting diminishing expectations that the ECB will follow the Federal Reserve in cutting interest rates, analysts said.
Jens Weidmann, the head of Germany's conservative central bank, cautioned Friday against any immediate policy move by the ECB, even as he warned that Germany's economy would be hurt by the spread of the virus.
Write to Tom Fairless at Tom.Fairless@WSJ.com