The Future of AI in Capital Markets

Tobias Adrian, Benjamin Mosk and Jason Wu

No 20748, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Generative Artificial Intelligence is starting to more significantly impact capital market trading activities, on the heels of the broad deployment of machine learning that has already revolutionized trading over the past two decades. The impact of Gen AI is characterized by its ability to process vast amounts of data, allowing market participants to translate new information quickly into price signals. While many current changes appear more evolutionary, more revolutionary shifts may emerge, potentially catching policy makers off guard. Gen AI can amplify existing risks but can also introduce entirely new risks. Rapid adoption could challenge whether existing surveillance and regulatory frameworks are sufficient. However, AI could also help regulators keep pace with growing market complexity, though skill gaps may hinder SupTech adoption.

Keywords: Capital; markets (search for similar items in EconPapers)
JEL-codes: G11 G12 G14 (search for similar items in EconPapers)
Date: 2025-10
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