U.S. Securities and Exchange Commission chairman warns: Artificial intelligence could cause financial crisis

Reference News Network reported on October 18According to a report on the US "Capitol Hill" website on October 16, Gary Gensler, Chairman of the US Securities and Exchange Commission, warned that if the rapid development of artificial intelligence is not treated properly, If technology is further regulated, it is “almost inevitable” that there will be a financial crisis caused by artificial intelligence in the next ten years.

Gensler said: "Frankly, this is a difficult challenge. This is a difficult financial stability problem to solve because our regulations are mainly focused on individual institutions, individual banks, individual money market funds, individual brokers. .This is a decision based on the nature of our work.”

He continued: "This is a 'horizontal problem' - many institutions may rely on the same underlying underlying model, or the same underlying data aggregator."

There are reports that Gensler predicts that a financial crisis may occur in the late 20s or early 30s of this century. Multiple institutions make decisions based on the same model, which may trigger a herd mentality and undermine market stability

He said: "I do think we will have a financial crisis in the future... people will write in the after-action report: 'Ah! We relied on... just a data aggregator or a model.'" Rewritten content: "I really think we may have a financial crisis in the future... people may write after the fact: 'Gee! All we relied on was a data aggregator or a Model.'"

Under Gensler’s leadership, the SEC proposed new rules in July aimed at limiting the use of artificial intelligence technology by broker-dealers and investment advisers

The new regulations prohibit relevant institutions from putting their own interests before the interests of investors when using predictive data analysis technology, including artificial intelligence, and other similar technologies. Some U.S. Republican lawmakers and industry insiders have expressed opposition to this new regulation

Gensler also admitted that the above-mentioned new rules will not solve the "horizontal problems" he mentioned that may trigger a financial crisis. (Compiled/Liu Ziyan)

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