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Bank of England to Review AI's Impact on Financial Stability

Concerns about 'herding behaviour' and cyber risks prompt closer scrutiny of AI and machine learning in the financial sector.

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Overview

  • The Bank of England is launching a review into the potential risks posed by artificial intelligence (AI) and machine learning to the UK's financial stability.
  • The review comes amid concerns that wider adoption of these technologies could lead to system-wide financial stability risks, such as 'herding behaviour' and increased cyber risks.
  • New AI and data providers could become important participants in financial markets and may require closer oversight.
  • The Bank's Financial Policy Committee will further consider the financial stability risks of AI and machine learning in 2024.
  • Despite concerns, the Bank acknowledges the significant benefits these technologies could bring to the financial sector, including greater operational efficiency, improved risk management, and new products and services.