ChainThink reports that on July 24, the International Monetary Fund (IMF) issued a warning that artificial intelligence is entering the core of the financial system and transforming how transactions, credit, regulation, and financial infrastructure operate.
The IMF says that large-scale synchronized use of AI models could amplify market volatility and introduce new systemic risks.
The IMF states that financial regulators must focus on three key areas: strengthening governance of AI-driven trading, credit activities, and regulatory technology (SupTech); enhancing market transparency regarding AI applications, model dependencies, and risk exposures;
Strengthen international cooperation to enhance the resilience of the financial system and cybersecurity capabilities. The IMF notes that AI is compressing decision-making timelines in financial markets, and machine learning models are already being used for trading strategies, high-frequency signal generation, corporate earnings analysis, and credit risk assessment.
During periods of market stress, if a large number of AI models simultaneously adjust their positions based on similar data and signals, it may trigger an "AI herding effect," exacerbating volatility and increasing the risk of a "flash crash."
The IMF also warned that the opacity of AI models could increase regulatory challenges, and that concentrated dependence by financial institutions on a limited number of cloud service providers, data suppliers, and AI model providers could create new sources of risk.
The IMF emphasized that AI can enhance regulatory judgment but cannot replace human decision-making.