Comparing minds and machines: implications for financial stability

Marcus Buckmann, Andrew Haldane and Anne-Caroline Hüser

Oxford Review of Economic Policy, 2021, vol. 37, issue 3, 479-508

Abstract: Is human or artificial intelligence more conducive to a stable financial system? To answer this question, we compare human and artificial intelligence with respect to several facets of their decision-making behaviour. On that basis, we characterize possibilities and challenges in designing partnerships that combine the strengths of both minds and machines. Leveraging on those insights, we explain how the differences in human and artificial intelligence have driven the usage of new techniques in financial markets, regulation, supervision, and policy-making, and discuss their potential impact on financial stability. Finally, we describe how effective mind–machine partnerships might be able to reduce systemic risks.

Keywords: artificial intelligence; machine learning; financial stability; innovation; systemic risk (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (4)

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