Press Release: State aid: Commission approves LBBW restructuring plan and impaired assets relief measure

The European Commission approved on 15 December 2009 under EU state aid rules the impaired asset relief measures and the restructuring plan of German-based financial institution Landesbank Baden Württemberg (LBBW). The restructuring plan demonstrates that LBBW is able to restore its viability while undue distortions of competition will be mitigated. Also the bank's own contribution to the restructuring costs is ensured through loss participations by hybrid capital holders. In addition, changes in the bank's corporate governance structure will provide an additional safeguard against excessive risk-taking and ensure that LBBW will be run on a sound commercial basis. The Commission has therefore concluded that the measures are compatible with EU rules on state aid to remedy a serious disturbance in a Member State's economy (Article 107(3)(b) of the Treaty on the Functioning of the European Union - TFEU).