On 16 July 2024, the Bank for International Settlements published a speech by Klass Knot (Chair of the Financial Stability Board (FSB) and President of the Netherlands Bank). The speech is dated 11 July 2024 and is entitled The AI adventure – how artificial intelligence may shape the economy and the financial system.

Key points in the speech include:

• Artificial intelligence (AI) is neither the great villain nor the great saviour of our time. It’s a technology that we can use to our benefit, but only if we implement the right policies and regulations.
• Regulators and policymakers should maintain a healthy balance between harnessing the benefits of innovation while mitigating the risks.
• The FSB is updating its paper on the financial stability implications of AI, originally published in 2017. Whilst it is too early to say with certainty what the paper’s conclusions will be, the emerging consensus is that the risks identified in the earlier report are still there. The most important ones are concentration risk, third-party risks, possible increases in herding behaviour, and model risk, including challenges with regard to explainability.