Global financial watchdogs to ramp up monitoring of AI

Group 1 - Global financial regulators are planning closer monitoring of AI risks as banks increase AI usage, with concerns about its impact on financial stability [1][4] - The Financial Stability Board warns that reliance on similar AI models and hardware could lead to herd-like behavior among institutions, creating vulnerabilities [2] - The Bank for International Settlements emphasizes the urgent need for central banks and regulators to enhance their capabilities regarding AI [3] Group 2 - Countries like the United States and China are competing to lead in machine-learning technology development, with AI having the potential to amplify market stress [4] - There is currently little empirical evidence that AI-driven market correlations significantly affect market outcomes, but financial institutions face risks from AI-related cyberattacks and fraud [4] - The European Union has initiated regulatory steps for AI with the implementation of the Digital Operational Resilience Act (DORA) [5]