Brussels, 16/12/2009 (Agence Europe) - On Tuesday 15 December, the European Commission authorised the impaired assets relief measures and restructuring plan of the German financial institution Landesbank Baden Württemberg (LBBW). This plan reveals that LBBW is able to restore its vitality, whilst undue distortions of competition will be limited. The bank's own contribution to the restructuring costs is also ensured through loss participations by hybrid capital holders. The Commission also notes that changes in the bank's corporate governance structure will provide an additional safeguard against excessive risk-taking and ensure that the bank will be run on a sound commercial basis. This allowed the Commission, therefore, to reach the conclusion that the measures were compatible with EU rules on State aid to remedy a serious disturbance in a Member State's economy. In the view of the European Commissioner for Competition, "this decision shows that German Landesbanks can meet the Commission's criteria for viable banks if they have the right business model". Neelie Kroes went on to stress that "LBBW will now focus its activities on financing German SME (Mittelstand) enterprises, away from risky investment activities". The Commissioner is also "particularly pleased with the improvement in corporate governance, which should not only increase corporate oversight, but also ensure that LBBW will be run on a purely commercial basis". (O.L./trans.fl)