ECB’s Lagarde says AI could trigger financial crises and calls for Cold War-style non-proliferation governance

TL;DR

Lagarde warned AI could trigger financial crises worse than job losses. She wants global AI governance like nuclear non-proliferation treaties. 109 banks stress-tested.

ECB President Christine Lagarde warned on Wednesday that artificial intelligence could trigger dangerous financial crises and called for global AI governance modelled on the Cold War-era non-proliferation agreements that kept the world safe from nuclear weapons. She spoke in Venice, the sharpest framing yet from a central bank chief on the systemic risks AI poses to the financial system.

“In recent history, there is one force that has destroyed more jobs and wiped out more savings than technology ever has, and that force is financial crises,” Lagarde said. “As these systems become more powerful, they are expanding further and further into the economy.”

The ECB has already subjected 109 banks to a severe AI-powered cyberattack scenario. Most weaknesses identified have been addressed....

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