Central banks must prepare for a major impact of artificial intelligence (AI) on the economy and the financial system. This is what researchers from the Bank for International Settlements (BIS) recommend.
“Rapid advances in AI require central banks to adopt this new technology,” recommends the Basel, Switzerland-based institution nicknamed the central bank of central banks. They must take advantage of it to “refine their own analytical tools”, in particular to better predict inflation.
For the BRI, the impact of artificial intelligence should not be underestimated. Technology should allow companies to adjust their prices much more quickly in response to economic changes, she believes. This could impact inflation, which central banks are working to control.
Jobs
The researchers also looked at the implications for the labor market. AI could make jobs redundant, but also create new ones.
In the financial sector, this technology can further contribute to efficiency and cost reduction for payments, lending, insurance and asset management, according to the report.
Artificial intelligence, however, carries risks, with potentially more sophisticated cyberattacks, the BIS worries. A human perspective remains necessary in the application of this technology, officials of the institution have also tempered.
Do not remain passive
According to the researchers, the best way for central banks to take advantage of this is to make full use of this AI themselves. This would also allow them to collect and analyze data much more quickly themselves, on the basis of which they could then adjust the economy.
The institution therefore calls on its 63 members not to remain “passive” and to “form a community of practices” to appropriate this technology and understand its effects on the global economy.
The increased importance of data as a cornerstone of the AI revolution also reinforces the need for cooperation between central banks, according to the BIS. Additionally, central bank policymakers need to be aware and take into account the potential impact of AI.
