The growing use of artificial intelligence has become a significant risk to stocks, bonds and financial markets in general, according to a new report from the chief US financial stability regulator.
It is the first time that AI was identified as a “vulnerability” by the Financial Stability Oversight Council in its annual report. Treasury secretary Janet Yellen, who also chairs the FSOC, on Thursday predicted at a meeting of the council that the use of AI by banks, investors and other financial market players is likely to continue to increase.
While Yellen called AI an “emerging threat” to financial stability, she also said she believed existing regulations could be used to curb the technology’s potential market risks.