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- Chief Compliance Officer and VP of Legal Affairs, Arrow Electronics
By Aaron Nicodemus2024-06-07T21:51:00
Warning of an “eventual reckoning” on artificial intelligence (AI) use by financial institutions, the acting head of the Office of the Comptroller of the Currency (OCC) said the industry should learn lessons on how similar disruptive technologies like derivatives and cryptocurrency evolved from being helpful to dangerous.
In a speech delivered Thursday at a Financial Stability Oversight Council (FSOC) conference, Michael Hsu said the risks posed by AI use by financial institutions might lead to bad outcomes, similar to when derivatives and financial engineering contributed to the 2008 financial crisis or cryptocurrencies’ crashing values during the “crypto winter” of 2022.
“If the past is any guide, the micro- and macro-prudential risks from such uses will emanate from overly rapid adoption with insufficiently developed controls,” he said. “What starts off as responsible innovation can quickly snowball into a hypercompetitive race to grow revenues and market share, with a ‘we’ll deal with it later’ attitude toward risk management and controls.”
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News and analysis for the well-informed compliance or audit exec.
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Our lowest price ($1 per day) for one year.
2024-06-20T15:40:00Z By Aaron Nicodemus
Compliance departments at financial institutions must become more involved in ensuring their firm’s operational resiliency to address emerging risks, the Treasury Department’s Office of the Comptroller of the Currency said in its semi-annual risk perspective.
2024-05-16T20:29:00Z By Adrianne Appel
Microsoft and Indeed stepped up to adopt new artificial intelligence principles put forth by President Joe Biden, while leading senators took a step toward crafting AI legislation.
2024-05-08T13:06:00Z By Aaron Nicodemus
Three experts join the Compliance Week podcast to discuss opportunities and risks posed by artificial intelligence, as well as governance frameworks your organization can implement to ensure AI tools are utilized safely and ethically.
2024-06-28T19:30:00Z By Jeff Dale
A Bank of England report warned of private equity risk management deficiencies as interest rates remain stagnant, with international coordination important.
2024-06-07T22:34:00Z By Adrianne Appel
Compliance has been “sleeping on” artificial intelligence, two panelists discussed at Compliance Week’s Women in Compliance Summit. The profession should be positioned to lead on AI governance at the business level.
2024-06-06T19:22:00Z By Aaron Nicodemus
A risk alert from the Securities and Exchange Commission listed top reasons why a registered broker-dealer might be the subject of an examination.
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