Finance

AI fears creep into finance, business and law

Published

2 years ago

January 13, 2024

AI fears creep into finance, business and law

Silicon Valley figures have long warned about the dangers of artificial intelligence. Now their anxiety has migrated to other halls of power: the legal system, global gatherings of business leaders and top Wall Street regulators.

In the past week, the Financial Industry Regulatory Authority (FINRA), the securities industry self-regulator, labeled AI an “emerging risk” and the World Economic Forum in Davos, Switzerland, released a survey that concluded AI-fueled misinformation poses the biggest near-term threat to the global economy.

Those reports came just weeks after the Financial Stability Oversight Council in Washington said AI could result in “direct consumer harm” and Gary Gensler, the chairman of the Securities and Exchange Commission (SEC), warned publicly of the threat to financial stability from numerous investment firms relying on similar AI models to make buy and sell decisions.

“AI may play a central role in the after-action reports of a future financial crisis,” he said in a December speech.

At the World Economic Forum’s annual conference for top CEOs, politicians and billionaires held in a tony Swiss ski town, AI is one of the core themes, and a topic on many of the panels and events.

In a report released last week, the forum said that its survey of 1,500 policymakers and industry leaders found that fake news and propaganda written and boosted by AI chatbots is the biggest short-term risk to the global economy. Around half of the world’s population is participating in elections this year in countries including the United States, Mexico, Indonesia and Pakistan and disinformation researchers are concerned AI will make it easier for people to spread false information and increase societal conflict.

Chinese propagandists are already using generative AI to try to influence politics in Taiwan, The Washington Post reported Friday. AI-generated content is showing up in fake news videos in Taiwan, government officials have said.

The forum’s report came a day after FINRA in its annual report said that AI has sparked “concerns about accuracy, privacy, bias and intellectual property” even as it offers potential cost and efficiency gains.

And in December, the Treasury Department’s FSOC, which monitors the financial system for risky behavior, said undetected AI design flaws could produce biased decisions, such as denying loans to otherwise qualified applicants.

Generative AI, which is trained on huge data sets, also can produce outright incorrect conclusions that sound convincing, the council added. FSOC, which is chaired by Treasury Secretary Janet L. Yellen, recommended that regulators and the financial industry devote more attention to tracking potential risks that emerge from AI development.

The SEC’s Gensler has been among the most outspoken AI critics. In December, his agency solicited information about AI usage from several investment advisers, according to Karen Barr, head of the Investment Adviser Association, an industry group. The request for information, known as a “sweep,” came five months after the commission proposed new rules to prevent conflicts of interest between advisers who use a type of AI known as predictive data analytics and their clients.

“Any resulting conflicts of interest could cause harm to investors in a more pronounced fashion and on a broader scale than previously possible,” the SEC said in its proposed rulemaking.

Investment advisers already are required under existing regulations to prioritize their clients’ needs and to avoid such conflicts, Barr said. Her group wants the SEC to withdraw the proposed rule and base any future actions on what it learns from its informational sweep. “The SEC’s rulemaking misses the mark,” she said.

Financial services firms see opportunities to improve customer communications, back-office operations and portfolio management. But AI also entails greater risks. Algorithms that make financial decisions could produce biased loan decisions that deny minorities access to credit or even cause a global market meltdown, if dozens of institutions relying on the same AI system sell at the same time.

“This is a different thing than the stuff we’ve seen before. AI has the ability to do things without human hands,” said attorney Jeremiah Williams, a former SEC official now with Ropes & Gray in Washington.

Even the Supreme Court sees reasons for concern.

“AI obviously has great potential to dramatically increase access to key information for lawyers and non-lawyers alike. But just as obviously it risks invading privacy interests and dehumanizing the law,” Chief Justice John G. Roberts Jr. wrote in his year-end report about the U.S. court system.

Like drivers following GPS instructions that lead them into a dead end, humans may defer too much to AI in managing money, said Hilary Allen, associate dean of the American University Washington College of Law. “There’s such a mystique about AI being smarter than us,” she said.

AI also may be no better than humans at spotting unlikely dangers or “tail risks,” said Allen. Before 2008, few people on Wall Street foresaw the end of the housing bubble. One reason was that since housing prices had never declined nationwide before, Wall Street’s models assumed such a uniform decline would never occur. Even the best AI systems are only as good as the data they are based on, Allen said.

As AI grows more complex and capable, some experts worry about “black box” automation that is unable to explain how it arrived at a decision, leaving humans uncertain about its soundness. Poorly designed or managed systems could undermine the trust between buyer and seller that is required for any financial transaction, said Richard Berner, clinical professor of finance at New York University’s Stern School of Business.

“Nobody’s done a stress scenario with the machines running amok,” added Berner, the first director of Treasury’s Office of Financial Research.

In Silicon Valley, the debate over the potential dangers around AI is not new. But it got supercharged in the months following the late 2022 launch of OpenAI’s ChatGPT, which showed the world the capabilities of the next generation technology.

OpenAI lays out plan for dealing with dangers of AI

Amid an artificial intelligence boom that fueled a rejuvenation of the tech industry, some company executives warned that AI’s potential for igniting social chaos rivals nuclear weapons and lethal pandemics. Many researchers say those concerns are distracting from AI’s real-world impacts. Other pundits and entrepreneurs say concerns about the tech are overblown and risk pushing regulators to block innovations that could help people and boost tech company profits.

Last year, politicians and policymakers around the world also grappled to make sense of how AI will fit into society. Congress held multiple hearings. President Biden issued an executive order saying AI was the “most consequential technology of our time.” The United Kingdom convened a global AI forum where Prime Minister Rishi Sunak warned that “humanity could lose control of AI completely.” The concerns include the risk that “generative” AI — which can create text, video, images and audio — can be used to create misinformation, displace jobs or even help people create dangerous bioweapons.

AI poses ‘risk of extinction’ on par with nukes, tech leaders say

Tech critics have pointed out that some of the leaders sounding the alarm, such as OpenAI CEO Sam Altman, are nonetheless pushing the development and commercialization of the technology. Smaller companies have accused AI heavyweights OpenAI, Google and Microsoft of hyping AI risks to trigger regulation that would make it harder for new entrants to compete.

“The thing about hype is there’s a disconnect between what’s said and what’s actually possible,” said Margaret Mitchell, chief ethics scientist at Hugging Face, an open source AI start-up based in New York. “We had a honeymoon period where generative AI was super new to the public and they could only see the good, as people start to use it they could see all the issues with it.”

Finance

FTSE 100 LIVE: Stocks muted as Trump delays strikes on Iran power plants

Published

10 hours ago

March 27, 2026

Press Room

FTSE 100 LIVE: Stocks muted as Trump delays strikes on Iran power plants

The FTSE 100 (^FTSE) was hovering around the flatline on Friday, while European stocks headed lower, as traders shrugged off Donald Trump’s latest pause on striking Iran’s energy infrastructure.

On Thursday night, the US president extended the deadline for Iran to open the strait of Hormuz by 10 days, meaning the new date would be 6 April. He claimed that talks were “going very well”. However, Iran denied it was “begging to make a deal”, despite Trump’s earlier claims.

It comes after Wall Street posted its biggest daily loss since the Iran war began on Thursday.

The Wall Street Journal also reported on Thursday that the US was considering sending as many as 10,000 additional troops to the Middle East.

Tony Sycamore, market analyst at IG, said Trump has extended the uncertainty gripping markets.

“While the rhetoric around de-escalation and dialogue is certainly preferable to outright conflict, the market appears to be growing increasingly numb to President Trump’s verbal reassurances. By extending the deadline, it effectively kicks the can down the road, pushing back any concrete resolution regarding the reopening of the Strait of Hormuz. This, in turn, simply extends the uncertainty weighing on markets and the broader global economy.”

Elsewhere, UK retail sales dipped by 0.4% in February, following a rise of 2.0% in January, the Office for National Statistics revealed. In the December to February quarter, sales volumes were up 0.7% compared with the previous three months.

London’s benchmark index (^FTSE) was hovering around the flatline in early trade
Germany’s DAX (^GDAXI) dipped 0.5% and the CAC (^FCHI) in Paris headed 0.2% into the red
The pan-European STOXX 600 (^STOXX) was down 0.3%
Wall Street is set for a muted start as S&P 500 futures (ES=F), Dow futures (YM=F) and Nasdaq futures (NQ=F) were all lacklustre.
The pound was 0.1% down against the US dollar (GBPUSD=X) at 1.3311

Follow along for live updates throughout the day:

LIVE 4 updates

Consumer confidence in Britain slips in March

GfK revealed on Friday that the UK confidence index fell two points to -21 in March – the weakest level since Donald Trump announced sweeping import tariffs in April last year. At the time, the index sank to -23.
Neil Bellamy, the firm’s consumer insights director, said the survey showed people are concerned about the prospects for inflation and the economy.
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The group said the sharp rise in energy prices caused by the effective closure of the strait of Hormuz and attacks on infrastructure in the region “has led to fears of higher inflation and weaker growth across oil-importing countries”.
A majority of respondents said the economy had improved modestly over the last year, but was about to decline significantly. They said they were likely to save more and spend less on big ticket items over the next 12 months as a result.
UK retail sales dip amid wet weather and weaker supermarket trading

UK retail sales decreased in February as supermarket sales slipped and demand for household goods was impacted by wet weather, according to official figures.
The Office for National Statistics (ONS) said the total volume of retail sales, which measures the quantity bought, fell by 0.4% last month.
It compared with a 2% rise in January, which was revised up from a previous estimate of 1.8%.
The monthly decline in February was nevertheless shallower than expected, with analysts having predicted a drop of 0.7% for the month.
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A fall in supermarket sales partly contributed to the fresh monthly decline, falling by 0.6%.
All food stores, which includes convenience stores and specialist retailers, reported a 0.7% decline in sales volumes, marking the weakest level since August last year.
Elsewhere, the data showed that household goods stores saw weaker demand, dropping by 2.6%, with retailers partly blaming “wet weather” for reduced demand.
Met Office data indicated that the UK, had above average rainfall in February 2026, more so than in either January this year or the previous February.
Non-store retailers also reported a slight dip over the month, with retailers suggesting that consumers brought forward spending to January to make the most of post-Christmas discounts.
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Matt Dalton, consumer sector leader at Forvis Mazars, said:
Asia and US overnight

Stocks in Asia were mixed overnight, stuck in a wait and see mode, with the Nikkei (^N225) fell 0.4% on the day in Japan, while the Hang Seng (^HSI) rose 0.4% in Hong Kong.
The Shanghai Composite (000001.SS) was 0.6% up by the end of the session and in South Korea, the Kospi (^KS11) lost 0.4% on the day. Part of the Kospi’s weakness was also due to the ongoing sell-off in South Korean chipmaker stocks from Google’s memory chip announcement.
Across the pond, the S&P 500 (^GSPC) slipped 1.7%, and the tech-heavy Nasdaq (^IXIC) was 2.4% down, both seeing their biggest declines since the start of the war and fell back to their lowest levels since September. The Dow Jones (^DJI) ended 1% lower, while the VIX index rose 2.11 points to 27.44pts, its highest since 6 March.
Part of the Wall Street selloff was also driven by the ongoing rout from Tuesday’s announcement that Google had found a new algorithm that could reduce the memory chip amount needed in AI models.
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Coming up

Good morning, and welcome back to our markets live blog. As usual we will be taking a deep dive into what’s moving markets and what’s happening across the global economy.
To the day ahead we’ll get the US March Kansas City Fed services activity, UK February retail sales. Central bank events include the ECB consumer expectations survey, and the Fed’s Daly and Paulson will speak.
Here’s a snapshot of what’s on the agenda today:

7am: UK retail sales for February

9am: ECB Consumer Inflation Expectations survey

2pm: University of Michigan consumer confidence report

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Finance

NDSU College of Business launches Center for Banking and Finance

Published

22 hours ago

March 26, 2026

Press Room

FARGO, N.D. – North Dakota State University’s College of Business has launched the Center for Banking and Finance, a new academic and industry‑engaged hub designed to prepare students for careers in banking and finance while supporting the evolving workforce needs of the region’s financial industry, a release states.

Announced during a press conference at NDSU’s Louise Auditorium at Barry Hall, the center brings together students, faculty and industry partners to expand experiential learning opportunities, strengthen connections to employers, and address emerging trends shaping the financial services industry. The center is housed within NDSU’s College of Business and builds on growing student interest in finance‑related programs.

“The Center for Banking and Finance reflects NDSU’s responsibility as a student‑focused, land‑grant, research university to respond to workforce and economic needs across our state and region,” said Interim President Rick Berg. “By connecting education, industry, and community, this center helps ensure our graduates are prepared to contribute on day one and throughout their careers.”

The center will support undergraduate and graduate students through hands‑on learning experiences, exposure to financial tools and technologies, and direct engagement with financial institutions, regulators and business leaders. It will also serve professionals already working in banking and finance through workshops, training and research‑informed programming aligned with business needs, according to the release.

“The Center for Banking and Finance is about momentum — students who are eager to learn, faculty who are pushing applied scholarship forward, and industry partners who want to shape the future workforce,” said Kathryn Birkeland, Ronald and Kaye Olson dean of the NDSU College of Business. “When education and industry move together, everyone benefits.”

The launch of the Center for Banking and Finance coincides with a series of regional events focused on finance, fintech and economic outlook, including programming with the Bank of North Dakota, the Federal Reserve Bank of Minneapolis and regional business leaders. Together, these events underscore the Fargo‑Moorhead area’s role as a hub for financial dialogue, talent development and economic collaboration.

The center’s foundational banking partners include Dacotah Bank, Gate City Bank, Bell Bank and Western State Bank, who attended the launch and are helping shape early student experiences and industry-informed programming.

The center is led by Mark Jensen, a career banker and longtime adjunct instructor who joined NDSU full-time in 2026 as director of the Center for Banking and Finance.

“The Center for Banking and Finance is designed as a bridge,” Jensen said. “It brings industry into the learning experience in meaningful ways, and it gives students clearer pathways into a wide range of banking and finance careers.”

For students, the center represents a more direct bridge between academic study and professional opportunity.

“As a finance student, experiences outside the classroom make a real difference,” said Tavian Nelson, a senior at NDSU majoring in finance. “Going into college, I knew I wanted to be involved in the finance program but was unsure of what that would look like once I graduated. The school has truly shaped my desired career outcomes with many hands-on experiences, professional leaders, and connections throughout my time here. This center will truly strengthen these experiences for students.”

Initially, the center will focus on experiential learning opportunities, business partnerships and workforce‑aligned programming, with plans to expand offerings as partnerships and resources grow. The center is supported through external funding and business engagement.

Finance

Iran war could trigger financial systemic stress, ECB vice president warns

Published

1 day ago

March 26, 2026

Press Room

Iran war could trigger financial systemic stress, ECB vice president warns

FRANKFURT, March 26 (Reuters) – Euro zone banks have limited direct exposure to the war in the Middle East, but the conflict ‌could still generate systemic stress given interconnected vulnerabilities, European Central ‌Bank Vice President Luis de Guindos said on Thursday.

Financial markets have come under stress in recent weeks from the impact of the U.S. and Israeli war on Iran, but the selloff outside the Middle East has been limited, even as some assets remain overvalued.

“Spillovers to the euro area financial sector have ‌so far remained contained,” ⁠de Guindos said in a speech. “Direct bank exposures to the region are limited, and the banking system is well ⁠positioned with strong profitability and robust capital and liquidity buffers.”

De Guindos argued that even market infrastructure operators, like central counterparties whose services include energy markets, have managed margin requirements effectively, despite the volatility.

Still, there was a broader risk, ‌given interconnections in the financial system, said de Guindos, whose roles at the ECB include monitoring financial stability.

“Amid already elevated global uncertainty, this conflict could trigger the unravelling of interconnected vulnerabilities and cause systemic stress,” he said.

The conflict threatens to derail market sentiment at a time when ‌asset valuations are high, potentially leading to a sharp repricing of risk for leveraged borrowers and sovereigns while amplifying stress in the non-bank financial sector, he said.

On the ‌ECB’s core mandate of ensuring low inflation, de Guindos repeated the bank’s warning that inflation could rise and growth slow on the conflict but argued more time was needed to understand the full impact.

“We are ‌unwavering in our commitment to ensuring that inflation stabilises at our 2% target in the medium term,” he said.

(Reporting by Balazs Koranyi; Editing by Toby Chopra)