Demonstrate proficiency in the following areas:

LO 9.1.7 The macro-financial analysis of uses of artificial intelligence and

machine learning uses

For example:

A. Describe economic growth and enhanced economic efficiency that could result

from artificial intelligence and machine learning applications to financial services.

B. Describe the implications of uses of artificial intelligence and machine learning

by financial institutions for market concentration and the systemic importance of

those institutions.

C. Describe how financial institutions’ uses of artificial intelligence and machine

learning could be sources of greater instability and vulnerability in financial markets.

D. Describe how the uses of artificial intelligence and machine learning by the

insurance industry could affect both moral hazard and adverse selection problems.

E. Describe challenges posed by the lack of interpretability or auditability in artificial

intelligence and machine learning applications in the financial industry.

Reading 9.1: Financial Stability Board. (2017). Artificial intelligence and machine learning in financial services: Market developments and financial stability implications.

Article  URL: https://www.fsb.org/wp-content/uploads/P011117.pdf