Hybrid instruments and Basel Accords.

Summary The Basel Committee, under the influence of the United States of America, has enacted regulations on capital, and in particular on hybrid instruments, designed to preserve the solvency of international banks and thus avoid any systemic financial crisis. However, such regulation does not seem likely to guarantee financial stability. The Basel Committee, whose legitimacy has been greatly weakened, produces complex standards under the abusive and exclusive influence of the major international banks. The hybrid instruments that have emerged from this process, due to their high level of complexity, are dangerously weakening the solvency of banks. To guarantee the effectiveness of regulation, the governance of the Basel Committee must be strengthened. Secondly, a better identification and qualification of hybrid instruments is necessary in order to reach the right balance between the protection of financial stability and the preservation of private interests.