SEC Boss Says AI-Triggered Financial Crisis ‘Nearly Unavoidable’ Without Regulation

Contact Your Elected Officials
The Epoch Times Header

Without regulations in place, the boss of the SEC expects a financial crisis stemming from the widespread use of artificial intelligence in the next decade.

United States Securities and Exchange Commission (SEC) Chair Gary Gensler believes a financial crisis stemming from the widespread use of artificial intelligence (AI) is “nearly unavoidable” without swift intervention by regulators.

In an interview with the Financial Times, Mr. Gensler outlined why, in his opinion, regulators must quickly find a way to manage risks posed to financial stability by the concentration of power in artificial intelligence platforms.

Wall Street Banks have been experimenting with AI for years to detect fraud and conduct market surveillance. Still, recently, they have expanded the use of AI to include account opening processes, brokerage apps, and more.

Mr. Gensler says he is concerned that multiple institutions could start basing their decisions on the same data models, leading to herd mentality and undermining stability in the financial markets, inadvertently unleashing another crisis that could trigger a recession.

“I do think we will in the future have a financial crisis, and in the after-action reports, people will say ‘Aha! There was either one data aggregator or one model we’ve relied on,” he said.

“Maybe it’s in the mortgage market, maybe it’s in some sector of the equity market,” Mr. Gensler added.

He predicts a financial crisis triggered by AI could happen as soon as the late 2020s or early 2030s. The last and most destructive market turmoil was the global financial crisis (GFC) between mid-2007 and early 2009, which caused the worst worldwide economic crisis since the Great Depression of 1929.

Experts say the GFC was triggered by a perfect storm of events, starting with a downturn in the American housing market and years of reckless risk-taking by investors and financial institutions alike. Regulation and policy errors were also considered a factor. Through linkages in the global financial system, the crisis spread worldwide.

By Stephen Katte

Read Full Article on TheEpochTimes.com

The Epoch Times
The Epoch Timeshttps://www.theepochtimes.com/
Tired of biased news? The Epoch Times is truthful, factual news that other media outlets don't report. No spin. No agenda. Just honest journalism like it used to be.

Armistice and amnesia  

In case you missed it too, June 25th marked the 75th anniversary of the beginning of the Korean War – the first hot front of the Cold War. 

Candace Owens Gets Sued by Macrons

Candace Owens began a deep dive into the lives of French President Emmanuel Macron, his wife Brigitte, and the story of how they came to be together.

Fluoride ‘Tablets’ For Babies EXPLODE in Popularity Amid Water Fluoridation Rollbacks

Reportedly, NPCs are so distraught that their toddlers won’t be fed a neurotoxin through the public water supply that they’ve resorted to fluoride pills.

ChatGPT Goes Biblical about End Times!

There are some truly outstanding internet content creators, or...

Bangkok Indians: ‘You Are Lucky Man’

In Bangkok, friendly prostitutes outside “massage” shops tell me I’m “so handsome man.” Indian men prowling those streets tell me I’m “lucky man.”

Education Department Probe Finds 5 Virginia School Districts Violated Title IX

Five school districts in No. VA violated Title IX by allowing students to access “intimate, sex-segregated facilities based on subjective ‘gender identity,’”

Washington State Sues to Prevent Trump Admin From Accessing Food Aid Immigration Data

Washington state is suing financial services company Fidelity Information Service to prevent it from sharing food aid data with the federal government.

5 Things to Know About Trump Admin’s Settlement With Columbia University

Under agreement between President Trump and Columbia regarding anti-Semitism, school will pay a $200 million fine to regain federal money.

Trumps America: Welp… that backfired.

The official @TheDemocrats account posted chart with the caption “Trump’s America” — but didn’t seem to notice how their own graph actually works.

Ex-DOJ Officials File Lawsuit Against Bondi Over Terminations

Former DOJ officials filed lawsuit against AG Bondi and the fed. govt, saying they were terminated for work on cases related to Jan. 6 Capitol breach.

Odds of U.S.-EU Trade Deal Are 50–50 Ahead of Tariff Deadline: Trump

President Donald Trump said there’s a 50–50 chance that the United States will finalize a trade deal with the European Union before an Aug. 1 deadline.

Trump Pulls Habba’s Nomination for New Jersey’s Top Prosecutor, Making Her Acting US Attorney

President Trump withdrew his nomination of Alina Habba to serve as NJ’s top federal prosecutor, making her Acting US Attorney.

Trump Says He Wants Musk’s Companies to ‘Thrive Like Never Before’

On Thursday, President Trump said, “I want Elon, and all businesses within our Country, to THRIVE, in fact, THRIVE like never before!”
spot_img

Related Articles