War and AI heighten risks to financial stability

“Concerns about new vulnerabilities to global financial stability are growing,” said Andrew Bailey, president of the FSB and governor of the Bank of England, in a press release.

The discussions notably highlighted the concerns surrounding the repercussions of the conflict in the Middle East on the raw materials markets, particularly those of energy.

 Inflation has increased and bond yields have increased, underlines the CSF. Although financial markets have so far continued to function well, uncertainty and volatility have increased. »

At the same time, the most recent AI models placed on the market “could significantly increase cybersecurity risks,” warns the CSF. While efforts to address the vulnerabilities uncovered by these models are important, they could also “ make the problems worse if done in a rushed or inadequate manner…” he continues.

“Members expressed particular concern that a combination of shocks could trigger multiple vulnerabilities simultaneously, thereby threatening financial stability,” the FSB reports.

In this context, the organization announced that it would publish in the “coming weeks” a consultation document presenting “best practices” intended for financial institutions adopting AI. A final report will be delivered to G20 finance ministers and central bank governors in October.

“Increased uncertainty and rapid transformations in the financial system and the broader economy highlight the need for sustained vigilance and continued international cooperation to address common challenges,” adds Andrew Bailey.

The FSB also emphasizes that several of its members are currently reviewing their regulatory policies and supervisory practices “in order to determine whether they remain adapted to changes in the financial system, whether they promote economic growth and whether they remain forward-looking and sufficiently flexible to address significant current and future risks, without compromising the resilience of the system…