What's new
Overview
This deep dive examines the latest developments in artificial intelligence, including emerging adoption patterns, key risk watch points, evolving policy and supervisory guidance, and research on the economic impact of AI.
What's new
Joint Committee of the European Supervisory Authorities sets 2027 priorities for digital resilience, innovation and cross-sector supervision
The Joint Committee of the European Supervisory Authorities has set its 2027 priorities for coordinated supervision, including digital resilience, technological innovation, sustainable finance, securitisation and cross-sectoral risk monitoring. Work will include oversight of critical technology providers under the Digital Operational Resilience Act, assessment of artificial intelligence and continued joint action on consumer protection.
International Monetary Fund flags elevated financial stability risks from AI repricing, sovereign yields and cyber threats
The International Monetary Fund warned that an AI-related market correction, a disorderly rise in sovereign yields and cyberattacks could sharply tighten global financial conditions. Banks remain broadly resilient, but stress tests classify institutions representing 22 percent of global banking assets as weak. The IMF called for tighter control of leverage, stronger bank and bond market safeguards, enhanced nonbank and cyber oversight, and robust legal and settlement frameworks for tokenized markets.
Organisation for Economic Co-operation and Development maps government approaches to securing AI compute and calls for national needs assessments
The OECD has mapped government policies for securing AI compute and calls for national needs assessments to guide investment. Of the jurisdictions reviewed, 21 treat compute as a dedicated pillar of their AI strategies, while only Canada and the United Kingdom have standalone national compute strategies. The OECD says countries should tailor domestic capacity and cross-border access arrangements to their economic, security and resilience needs.
Sveriges Riksbank First Deputy Governor Bunge warns of AI related financial risks and reiterates case for a rate rise before year end
Sveriges Riksbank First Deputy Governor Aino Bunge warned that debt financed AI investment, complex funding structures and AI driven cyberattacks could transmit stress through financial markets. She also reiterated that stronger Swedish activity and elevated inflation pressures would probably justify a policy rate rise before the end of 2026, while emphasizing uncertainty over the scale of tightening.
Bank for International Settlements working paper identifies consumer demand bottleneck as a plausible constraint on AI growth
A Bank for International Settlements working paper finds that AI automation could shrink consumption’s share of output and weaken the consumer rents that support further innovation. Its calibrated demand bottleneck scenario produces a brief acceleration before growth falls below the pre-AI rate of 2%, while the most optimistic scenario reaches 5.5% after two decades. The divergent paths imply substantial uncertainty for the natural rate of interest.
Financial Stability Board flags sovereign bond, private credit and AI risks in G20 policy package
The Financial Stability Board has flagged sovereign bond volatility, private credit vulnerabilities and AI-related risks in a policy package for the G20. It calls for stronger cross-border stablecoin oversight and presents final AI sound practices, proposed regulatory modernization principles and reviews of policy implementation and bank resolution funding. Further work on AI and implementation monitoring is planned for 2027.
International Monetary Fund technical note finds AI financial stability risks manageable as leverage and interconnectedness rise
An International Monetary Fund technical note finds that AI related financial stability risks remain manageable but could grow as investment relies more heavily on external and interconnected financing. Vulnerabilities are concentrated among infrastructure and cloud providers, while circular financing, technological obsolescence and correlated markets could amplify shocks. The note highlights the need for better exposure data, scenario analysis and monitoring of leverage across banks and nonbank financial institutions.
Italian Institute for Insurance Supervision and partners launch cybersecurity campaign targeting online fraud involving artificial intelligence
The Italian Institute for Insurance Supervision and financial sector partners have launched a new edition of the “I Navigati” cybersecurity awareness campaign, with a focus on online fraud involving artificial intelligence. Digital guidance and information events at participating bank branches will help citizens, families and businesses prevent scams and use digital tools more safely.
Bank of Italy releases seven Occasional Papers on AI, tokenized money and financial market risks
The Bank of Italy has released seven studies covering AI, tokenized money, exchange rates, public procurement, private capital and climate-related investment behavior. The papers find that AI’s inflation effects depend on supply and demand timing, while bearer tokenized money can create par-value and regulatory risks regardless of the underlying technology. Other findings highlight litigation-related procurement delays, Italy’s still-underdeveloped private capital market and institutional selling of hurricane-exposed U.S. equities.
Canada's Office of the Superintendent of Financial Institutions focuses semiannual risk outlook on frontier AI threats
The Office of the Superintendent of Financial Institutions warned that frontier AI can amplify cyber, technology, third-party and reputational risks across Canada’s financial system. Institutions should strengthen governance, controls and testing, while boards and senior management remain accountable for managing these risks. OSFI is also enhancing its assessment of frontier AI, technology concentration and critical third-party dependencies.
Bank for International Settlements paper finds AI's net climate impact uncertain and outlines central bank implications
A Bank for International Settlements paper finds that AI could aid climate mitigation and adaptation while increasing electricity demand, emissions and resource use. Its net climate effect remains uncertain and could influence central bank assessments of potential output, inflation and financial stability. The paper highlights the need for better environmental measurement, more efficient AI systems and sustainable energy infrastructure.
Bank of France finds 20 percentage point hiring gap for young workers in occupations most exposed to generative AI
The Bank of France found that permanent hiring of workers ages 21 to 29 fell 20 percentage points more in occupations most exposed to generative AI than in the least exposed occupations between November 2022 and March 2026. Contract terminations also declined, pointing to lower turnover rather than a clear fall in total employment. The analysis identifies an association but does not isolate AI from other labor market forces.
Canada’s Office of the Superintendent of Financial Institutions urges disciplined risk-taking and stronger oversight of interconnected and AI risks
OSFI Superintendent Peter Routledge urged financial institutions to combine disciplined risk-taking with stronger governance of interconnected, operational and AI risks. Boards should establish crisis responsibilities and intervention triggers in advance and maintain oversight of material and third-party AI uses. OSFI also plans a dashboard showing concentrations and potential evolution of catastrophic risk across Canada.
Arab Monetary Fund convenes financial stability task force on AI, cybersecurity and sukuk market risks
The Arab Monetary Fund has convened its regional financial stability task force to examine AI and cybersecurity risks, external shocks and vulnerabilities in sukuk markets. The meeting also covers preparations for the 2027 Financial Stability Report and the task force’s future work plan.
Banking Agency of the Federation of Bosnia and Herzegovina ombudsmen share approaches to accessibility and AI related complaints
The Banking Agency of the Federation of Bosnia and Herzegovina’s banking system ombudsmen presented their approach to accessibility and handling customer complaints at the INFO Network annual conference. Discussions also covered AI generated complaints, fraud, financial crime and standards for effective ombudsman institutions.
South Korea Financial Services Commission designates 24 innovative financial services, including 21 generative AI uses
The South Korea Financial Services Commission designated 24 innovative financial services, including 21 generative AI uses and new services for secondhand card payments, joint corporate lending and mobile enrollment in wrap type cash management accounts. It also extended IBK Securities’ fractional overseas share service for two years and accepted SK Securities’ request to enable such trading without a regulatory exemption.
Monetary Authority of Singapore issues final AI risk management guidelines for all financial institutions, with phased implementation from October 2027
The Monetary Authority of Singapore has finalized risk proportionate AI risk management guidelines covering all financial institutions and forms of AI. Firms must strengthen oversight, apply life cycle controls and remain accountable for third-party AI, with simpler arrangements permitted for immaterial uses. The Guidelines take effect in phases from Oct. 7, 2027, while MAS plans a 2027 consultation on possible agentic AI guidance.
Russian Government outlines domestic AI use rules and stronger cybersecurity safeguards
The Russian Government outlined plans to require domestic foundation models in designated critical infrastructure and sensitive sectors, with a transition period for companies. It also plans to define rules for AI agents and strengthen coordinated anti-fraud, account security and penetration testing measures across state and private digital systems.
Financial Planning Standards Board finds rising AI adoption among planners and growing use by clients
Financial Planning Standards Board research found that financial planners are increasingly adopting AI to improve efficiency, analysis and client capacity. Eighty-three percent expect AI to improve client service, while growing client use of AI is creating more demand for planners to contextualize or correct generated information.
World Bank projects 2.2% growth for Latin America and the Caribbean in 2026 and outlines uneven AI gains
The World Bank projects 2.2% growth for Latin America and the Caribbean in 2026, with stronger policy performers outpacing a modest regional average amid downside risks from energy prices, high debt and El Niño. It sees scope for AI to raise productivity but identifies skills, management and organizational capacity as the main barriers to productive adoption.
World Bank projects 2.1% MENAAP contraction in 2026 and highlights AI productivity potential
The World Bank projects a 2.1% contraction across MENAAP in 2026, with the Strait of Hormuz closure driving a 4.3% average contraction in Gulf Cooperation Council economies. Growth excluding Iran could rebound to 7.8% in 2027 if the conflict subsides by the end of 2026. Artificial intelligence could raise productivity in 13% to 20% of regional jobs, but skills, infrastructure, data and private sector gaps must be addressed.
World Bank projects India’s economy to grow 7.1% in FY27 and calls for measures to broaden AI adoption
The World Bank projects India’s economy to grow 7.1% in FY27, supported by domestic demand and exports, while warning of elevated external risks. It calls for stronger infrastructure, workforce skills and business conditions to broaden AI adoption, alongside clear rules for data security and privacy.
European Central Bank finds firms in AI intensive sectors shifting debt financing from banks to markets
The European Central Bank finds that firms in AI intensive sectors increasingly use market based debt financing and carry less leverage than other firms. Their investment may therefore be less sensitive to bank lending and cash flow channels, but more exposed to longer term market rates. Deeper European capital markets could improve access to funding and channel more savings into European AI investment.
Thailand's Office of Insurance Commission tests cyber resilience of 67 insurers against AI related threats
Thailand’s Office of Insurance Commission completed two cyber exercises involving 67 life and nonlife insurers. The simulations tested incident response and regulatory coordination against increasingly complex threats involving AI, external providers and interconnected digital systems.
South Korea Financial Services Commission directs sectorwide cybersecurity reviews following reported intrusions
The South Korea Financial Services Commission directed all financial firms to complete and report comprehensive cybersecurity reviews following reported intrusions. Firms must tighten external access, authentication and threat detection, apply shared attack intelligence, and protect and compensate affected consumers. The authorities will strengthen sectorwide monitoring and may take strict action where known risks are not addressed.