Bank of Japan Governor Warns AI Could Bring New Financial Stability Risks

Bank of Japan Governor Kazuo Ueda said on Thursday central banks must be mindful that technological advances, such as in the area of artificial intelligence (AI), could bring new risks to financial stability.

“As financial services grow more diverse and complex, the channels of risk transmission have become less transparent, and current financial regulations may not be fully equipped to manage new types of financial services,” Ueda said.

“This environment underscores the need for operational resilience, including robust management of cybersecurity and third-party risks,” he said in a speech at the Paris Europlace Financial Forum in Tokyo.

(Reporting by Leika Kihara and Makiko Yamazaki; editing by Kim Coghill)