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Artificial intelligence can act to either stabilise the financial system or to increase the frequency and severity of financial crises. This second column in a two-part series argues that the way things turn out may depend on how the financial authorities choose to engage with AI. The authorities are at a considerable disadvantage because private-sector financial institutions have access to expertise, superior computational resources, and, increasingly, better data. The best way for the authorities to respond to AI is to develop their own AI engines, set up AI-to-AI links, implement automatic standing facilities, and make use of public-private partnerships.
