AI: The Future Watchdog of Financial Regulation

Bank of England Governor, Andrew Bailey, has underscored the potential of artificial intelligence in strengthening the oversight of the financial sector. Speaking at an event organized by the London School of Economics, Bailey highlighted how AI could be pivotal in analyzing extensive data to identify underlying issues within financial institutions.

Bailey expressed concerns about central banks' current data usage, emphasizing the need for improvement. He warned of the risk that regulators might miss critical evidence due to underutilized data resources, potentially overlooking significant warning signs within the system.

Additionally, Bailey reiterated his stance against reducing financial regulation, emphasizing that doing so could foster risky practices detrimental to the economy. He contested the notion that regulation is a constraint on businesses, aligning with the Bank of England's commitment to robust sector governance.

(With inputs from agencies.)