Artificial intelligence (AI) may be fundamentally disruptive, but it helps boost the productivity of the British economy, posing a challenge for regulators who must be open to new approaches to formulating rules, an England banking policymaker said on Tuesday central.
The UK has so far taken a cautious approach to creating rules tailored to AI, unlike the European Union, whose members on Tuesday formally backed new baseline rules that are likely to set a standard for other countries.
Randall Kroszner, a member of the Financial Policy Committee of the British central bank, analyzed how the monetary authority should juggle two formal objectives: maintaining financial stability and helping economic growth, for example, by enabling innovation.
“The challenge is therefore to develop a regulatory framework that promotes the flourishing of creativity and innovation, but which takes into account potential risks to financial stability,” Kroszner said in a speech.
“Regulators, however, need to be open to new approaches that could shape these structures.”
When innovation is disruptive, it is harder for regulators to know what actions should be taken to achieve financial stability, he said.
“There may be no common framework for assessing both the likely impact of innovation and the consequences (intended and unintended) of regulatory action,” he added.
Source: Terra
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