Brussels, 30/06/2009 (Agence Europe) - The European Commission announced on Tuesday 30 June that it had granted temporary clearance to a recapitalisation and an asset relief measure provided to Landesbank Baden-Württemberg (LBBW) by the German State of Baden-Württemberg. The recapitalisation will take the form of a €5 billion capital injection by its current owners. LBBW, Germany's fifth largest bank, is owned by the Land of Baden-Württemberg and other public bodies. The Commission considers that the 10% remuneration in compensation for the recapitalisation will not unduly distort competition. With regard to the impaired assets, the Commission will undertake a further in-depth analysis of the measures planned through a guarantee structure for asset portfolios. Under this system, LBBW will retain the risk of default up to a certain amount while the State of Baden-Württemberg will bear potential losses exceeding this amount. Guarantees will apply only to certain securitised assets. The Commission has no objection a priori to the initiative, but a more in-depth investigation is required. The authorisation will only be for a period of six months, therefore. (C.D./transl.rt)