ECB Says German, Belgian Banks Need to Reduce Leverage

Banks in Belgium, Cyprus and Germany are among the most leveraged in the euro area and probably need to increase their equity as a share of assets, the European Central Bank said.

Banks in Cyprus were most leveraged on average, with equity amounting to 3 percent of assets at the end of 2012, while lenders in Estonia were least leveraged with a ratio of 13.3 percent, the Frankfurt-based ECB said in a report published on its website today. That dispersion suggests some banks “need to make further progress,” according to the ECB.