Recall Black Monday? What AI algorithms could do to financial markets is much harder to fathom
Anand, Kazinnik, Leonello and Panetti say that their results “can fundamentally alter how financial fragility emerges in markets.” This has implications for policymakers. “Some AI agents may produce excessive and unnecessary redemptions, while others may generate unpredictable outcomes. As AI becomes more deeply embedded in financial decisions, understanding these differences will be salient for assessing its implications for financial stability.”
