In a recent address to the National Press Club in Washington, Gary Gensler, Chair of the U.S. Security and Exchange Commission (SEC), expressed concern over the potential economic instability that could arise from the monopolization of artificial intelligence development by major tech corporations, particularly for applications in financial markets. Gensler emphasized the potential for AI to amplify financial instability, suggesting that the technology could encourage a herd mentality among individual market actors. This could occur if these actors make similar decisions based on identical signals received from a fundamental model or data aggregator. “Model risk management tools, while lowering overall […]