Central Banks Must Navigate AI’s Dual Impact: BIS Report

Embracing AI: Central banks must leverage AI to enhance operations and maintain financial stability.
AI Benefits: AI enhances efficiencies in lending, payments, insurance, and asset management, offering more accurate credit assessments and risk evaluations.
AI Risks: AI introduces risks such as sophisticated cyber attacks and systemic risks like herding behavior in financial markets.

Operational Efficiency: Central banks can streamline operations, reduce costs, and improve decision-making with AI, enhancing overall efficiency.
Enhanced Security: Robust cybersecurity measures are necessary to mitigate risks associated with AI, ensuring the protection of financial systems.
Predictive Capabilities: AI allows for real-time economic analysis, improving the accuracy of inflation predictions and other economic variables.
Global Cooperation: Sharing AI tools and best practices across borders is crucial for maximizing AI’s potential and maintaining financial stability.

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