AI could undermine financial oversight by giving market participants new ways to circumvent rules that regulators never anticipated. Overly complicated regulations give AI agents more ways to game the system, underscoring the need to streamline existing frameworks and equip officials with AI tools of their own.
STANFORD—The theme of last month’s annual gathering of central bankers and economists in Jackson Hole, Wyoming, was “financial innovation.” One major issue looming over the meeting was how new technologies, specifically AI, might affect financial stability.