The U.S. Department of the Treasury on Thursday initiated an inquiry into the integration of artificial intelligence in financial services. This move coincides with the Office of the Comptroller of the Currency’s acting chief’s warning that a potential “nightmare” scenario involving AI on Wall Street is “uncomfortably plausible.”
The Treasury issued a comprehensive request for information to understand how AI is currently being utilized by financial institutions, its potential future applications, and the associated risks for banks, businesses, regulators, consumers, and other market participants. This inquiry, open for a 60-day comment period, is part of the Biden administration’s broader efforts to regulate AI and its fast-evolving applications across various industries.
Treasury Secretary Janet Yellen emphasized the urgency of this initiative, noting that AI’s rapid development presents significant opportunities and risks for the financial sector. Yellen highlighted that the Financial Stability Oversight Council (FSOC), which she chairs, is closely monitoring AI’s impact on financial stability and is working on building supervisory capacity to better understand these risks.
