Artificial intelligence and stability

February 6, 2025

Financial institutions are rapidly embracing AI – but at what cost to financial stability? This column argues that AI introduces novel stability risks that the financial authorities may be unprepared for, raising the spectre of faster, more vicious financial crises. The authorities need to (1) establish internal AI expertise and AI systems, (2) make AI a core function of the financial stability divisions, (3) acquire AI systems that can interface directly with the AI engines of financial institutions, (4) set up automatically triggered liquidity facilities, and (5) outsource critical AI functions to third-party vendors.

Published on VoxEU.org

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