ECB’s Nagel Sees AI as Both Analytical Tool and Emerging Macroeconomic Force

9 December 2025

By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Joachim Nagel on Tuesday underscored both the opportunities and challenges posed by rapid advances in artificial intelligence, arguing that central banks must embrace the technology while remaining anchored in their public mandates.

Speaking at the Joint SUERF-Deutsche Bundesbank conference in Frankfurt, Nagel, who heads the Deutsche Bundesbank, said that one of the most immediate applications for central banks lies in improving analytical capacity.

“AI offers tools to process vast datasets,” he said. “These can help, amongst other things, to detect previously unseen patterns. But they can also improve predictive accuracy.”

He said machine learning could identify inflationary pressures, labor-market shifts or structural breaks in the economy faster than traditional models.

Nagel stressed, however, that the technology would not substitute for human expertise and, in the case of the Bundesbank, it is complemented by the work of employees.

He also noted that AI is no longer just an analytical instrument but an emerging economic force in its own right.

“It can, amongst other things, affect productivity, labor markets, and capital formation,” he said. “For example, it will impact on the diffusion of innovation and may thus affect potential growth.”

He said central banks, which depend on credibility and transparency, should invest in AI tools that are explainable and interpretable.

The speed of AI’s evolution also raised the bar for policymakers, given the rapid impact it is expected to have in the economy, he said.

Nagel wrapped his remarks by insisting that central banks’ embrace of AI must remain firmly grounded in their institutional purpose. “We should use AI to serve the public interest by fulfilling our mandate. This goal and our commitment to it remain as important as ever,” he said.