Work

Artificial Intelligence and Systemic Risk

Year: 2019

Type: article

Abstract: 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.

Source: Journal of Banking & Finance

DOI: 10.1016/j.jbankfin.2021.106290

Authors: Jón Daníelsson, Robert Macrae, Andreas Uthemann

Institutions: Systemic Risk Centre, London School of Economics and Political Science, Bank of Canada

Language: English

Topic: Banking stability, regulation, efficiency

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: hybrid

Estimated APC paid: $1,950

Funders: Engineering and Physical Sciences Research Council, Economic and Social Research Council