How the financial authorities can respond to AI threats to financial stability
Artificial intelligence can act to either stabilise the financial system or to increase the frequency and severity of financial crises. This second...
Opinion Pieces
AI financial crises
The rapid adoption of artificial intelligence is transforming the financial industry. This first of a two-column series argues that AI may either...
Why so many crises happen when we know why they happen and how to prevent them
Financial crises are not complicated, and many claim to know why they happen and how to prevent them. Why then do they happen with such alarming...
How the financial authorities can take advantage of artificial intelligence
Artificial intelligence will both be of considerable help to the financial authorities and bring new challenges. This column argues the authorities...
When risk models hallucinate
Risk model hallucination happens when models are forced to forecast the likelihood of extreme events in cases where they have not been trained with...
How AI can undermine financial stability
As artificial intelligence makes inroads into the financial system, it exacerbates existing channels of instability and creates new ones. This column...
Artificial intelligence and financial stability
The use of artificial intelligence in the private sector is accelerating, and the financial authorities have no choice but to follow if they are to...
Stress-testing the banking system: what lies ahead?
Pedro Duarte Neves says stress tests must evolve to capture systemic, liquidity and cyber risks.
Stylised facts on the effectiveness of macroprudential policy
This policy note summarises the main empirical findings on the effectiveness of macroprudential policy: macroprudential policy contributes to a...
When artificial intelligence becomes a central banker
Artificial intelligence is expected to be widely used by central banks as it brings considerable cost saving and efficiency benefits. However, as this...
The legacy of cryptocurrencies
Crypto-promoters and financial authorities are split on the future of cryptocurrencies. Should crypto join the mainstream or remain in the wilderness...
The case against aggressive government action on crypto
The financial regulators have recently taken an active interest in cryptocurrencies, more than a decade after their law enforcement counterparts did...
What Silicon Valley Bank and Credit Suisse tell us about financial regulations
The downfall of Silicon Valley Bank and Credit Suisse has exposed failures in how we regulate the financial system. This column argues that the...
Lessons from the collapse of Silicon Valley Bank
The collapse of Silicon Valley Bank shows that banks still pose risks. Are they systemic? Jon Danielsson, Robert Macrae, and Nikola Tchouparov write...
The illusion of control: why the financial sector is more vulnerable than ever to a financial crisis
Reforms following the global financial crisis of 2008 were supposed to create a less risky financial world. But has a one-size-fits all approach to...
Cultural Stereotypes of Multinational Banks
Financial markets, even more than other markets, run on trust. This column uses hand-collected data on banks’ investments in European sovereign debt...
