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Bank regulators increase scrutiny of banks' AI use amid stability fears
The inquiry includes questions on whether banks use Chinese-developed AI technology and how they control autonomous systems, Reuters reports.
Banking regulators are stepping up efforts to contain emerging AI risks, with officials warning that AI could increase threats such as cyberattacks or malfunctioning automated tools that destabilize financial systems, Reuters reported, citing six sources familiar with the matter.
In the United States, three top regulators, including the Federal Reserve, are asking banks about how they use advanced AI models, including whether they deploy Chinese-developed technology, use AI agents for cyber defense, and can control increasingly autonomous systems, according to the sources.
In Europe, supervisors including the Bank of England and the European Central Bank are pressing banks to strengthen recovery plans, as concerns grow that rapid AI progress could harm and disrupt financial markets sooner than regulators previously expected, the report said.
The renewed scrutiny is also linked to a recognition that frontier AI adoption may require higher spending on cyber recovery, closer attention to reliance on external technology providers, and in some jurisdictions more formal regulatory guidance, Reuters added.