Artificial intelligence and systemic risk

Artificial intelligence and systemic risk

Artificial intelligence (AI) is rapidly changing how the financial system is operated, taking over core functions for both cost savings and operational efficiency reasons. AI will assist both risk managers and the financial authorities. However, it can destabilize the financial system, creating new...

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Veröffentlicht in:Journal of banking & finance 2022-07, Vol.140, p.106290, Article 106290
Hauptverfasser: Daníelsson, Jón, Macrae, Robert, Uthemann, Andreas
Format: Artikel
Sprache:eng
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Zusammenfassung:Artificial intelligence (AI) is rapidly changing how the financial system is operated, taking over core functions for both cost savings and operational efficiency reasons. AI will assist both risk managers and the financial authorities. However, it can destabilize the financial system, creating new tail risks and amplifying existing ones due to procyclicality, unknown-unknowns, the need for trust, and optimization against the system.
ISSN:0378-4266
1872-6372
DOI:10.1016/j.jbankfin.2021.106290