ECB’s Knot: AI Could Be Beneficial, Given the Right Regulations

11 July 2024

By Isabel Teles – FRANKFURT (Econostream) – European Central Bank Governing Council member Klaas Knot on Thursday said that appropriate policies were necessary to guarantee that artificial intelligence (AI) contributed positively to the economy.

In a speech during the International Monetary Fund and World Bank Constituency meeting in Moldova, the text of which was posted on the website of De Nederlandsche Bank, which he heads, Knot said, ‘[A]rtificial intelligence is neither the great villain nor the great saviour of our time. It’s a technology that we can use to our benefit, but only if we implement the right policies and regulations.’

Policymakers and regulators should balance the advantages and the risks associated with AI, he said.   

‘Many of the potential risks of AI may seem new, but when you look beneath the surface, they are strikingly similar to traditional financial risks. Risks that we are familiar with’, he said. ‘We already have frameworks to assess concentration risk, third party dependence and interconnectedness.’

However, it was important to consider that new forms of interconnectedness could emerge and expose new risks, he said.