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Journal of Banking & Finance Vol. 140 2022

Artificial intelligence and systemic risk

Jón Daníelsson; Robert Macrae1,2; Andreas Uthemann2,3,1

1 London School of Economics and Political Science · 2 Systemic Risk Centre · 3 Bank of Canada

open access

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.

DOI
10.1016/j.jbankfin.2021.106290
Volume
140
Pages
106290
Language
en
Sources
crossref openalex bibtex:phds-export.bib

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