The European Commission's decision to eradicate state-supported financial guarantees will force the German Landesbanks to rethink their strategy going forward, which will depend largely on what restructuring techniques are implemented in the future.

According to a Commerzbank report, future ratings of non-guaranteed obligations under the new agreement will depend on future business and financial profiles, legal and ownership structures, and other factors. This will be the key assessment of the banks' ratings in the absence of the explicit support of Anstalslast and Gewahrtagerhaftung. The EC regulations now dictate that these state support instruments will be replaced by normal owner relationship, but issues will be grandfathered and a transitional period will exist until July 2005.

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