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 tail risks and amplifying existing ones due to procyclicality, unknown-unknowns, the need for trust, and optimization against the system.

# Banking stability, regulation, efficiency # Economics, Econometrics and Finance # Digital Transformation in Financial Services # FinTech, Crowdfunding, Digital Finance # Business, Management and Accounting

Jón Danı́elsson, Robert Macrae, Andreas Uthemann (2019). "Artificial Intelligence and Systemic Risk". Journal of Banking & Finance. https://doi.org/10.1016/j.jbankfin.2021.106290