BRUSSELS - European Central Bank head Christine Lagarde told EU leaders euro zone banks were resilient because they have strong capital and liquidity positions, but that the ECB could provide liquidity if needed, EU officials said on Friday.

Lagarde was presenting her assessment of economic and financial developments to EU leaders as European banking stocks fell sharply, with Deutsche Bank and UBS knocked by worries that actions by regulators and central banks have not yet contained the worst problems.

"The euro area banking sector is resilient because it has strong capital and liquidity positions," EU officials at the meeting reported Lagarde as telling the leaders.

"The euro area banking sector is strong because we have applied the regulatory reforms agreed internationally after the Global Financial Crisis to all of them," she said.

"The ECB toolkit is fully equipped to provide liquidity to the euro area financial system, if needed," she said.

(Reporting by Jan Strupczewski)