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.
