AI financial crises

July 26, 2024

The rapid adoption of artificial intelligence is transforming the financial industry. This first of a two-column series argues that AI may either increase systemic financial risk or act to stabilise the system, depending on endogenous responses, strategic complementarities, the severity of events it faces, and the objectives it is given. Stress that might have taken days or weeks to unfold can now happen in minutes or hours. AI's ability to master complexity and respond rapidly to shocks means future crises will likely be more intense than those we have seen so far.

Published on VoxEU.org

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