Artificial Intelligence and Systemic Risk
23 Pages Posted: 28 Jun 2019 Last revised: 9 Mar 2020
Date Written: March 1, 2020
Abstract
Artificial intelligence (AI) is rapidly changing how the financial system is operated, taking over core functions because of cost savings and operational efficiencies. AI will assist both risk managers and microprudential authorities. It meanwhile has the potential to destabilise the financial system, creating new tail risks and amplifying existing ones due to procyclicality, endogenous complexity, optimisation against the system and the need to trust the AI engine.
Keywords: Artificial intelligence, systemic risk
JEL Classification: G00, G38, G21
Suggested Citation: Suggested Citation
Danielsson, Jon and Macrae, Robert and Uthemann, Andreas, Artificial Intelligence and Systemic Risk (March 1, 2020). Available at SSRN: https://ssrn.com/abstract=3410948 or http://dx.doi.org/10.2139/ssrn.3410948
Here is the Coronavirus
related research on SSRN
Feedback
Feedback to SSRN
If you need immediate assistance, call 877-SSRNHelp (877 777 6435) in the United States, or +1 212 448 2500 outside of the United States, 8:30AM to 6:00PM U.S. Eastern, Monday - Friday.
