Bank mergers in Germany are an effective tool to reduce costs but any deal will require a sustainable business model, Bundesbank board member Joachim Wuermeling said.

Wuermeling's comments come just days after Deutsche Bank and Commerzbank, Germany's top two lenders, announced they were in merger talks.

Wuermeling, without naming Deutsche or Commerzbank, added that supervisors will be neutral in evaluating any merger proposals and they will never actively initiate them.