Standard & Poor's revisited the Landesbank credit issue in late November, stating that it will be publishing its stand-alone ratings for the Landesbanks one year ahead of the 2005 deadline. At that point, the German banks will officially lose their public- sector support mechanisms - state guarantees that had granted them optimal credit ratings (see ASR 7/29/2002).

The European Commission decision to remove the Anstalslast and Gewahrtagerhaftung guarantees in 2001 has forced the Landesbanks to rethink their strategies. The EC regulations now dictate that these state support instruments will be replaced by normal owner relationships, but past issues will be grandfathered and a transitional period will exist until July 2005.

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