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Machines Aren’t Coming for the Lords of Finance, Yet

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Machines Aren’t Coming for the Lords of Finance, Yet

(Bloomberg Opinion) — Central bankers aren’t born as chronic worriers, but they quickly acquire the trait. They are now spending considerable time fretting about artificial intelligence: Its ability to play havoc with prices, jobs, and the security of banking. As gut-wrenching as the meltdown of 2008 was, imagine if a rogue machine turbocharged a market rout. 

It’s not quite a doomsday scenario where AI runs amok and destroys the Earth, said Eddie Yue of the Hong Kong Monetary Authority at a recent conference. But there are plenty of dangers emerging, he added. Yue’s counterpart in Singapore warned of the potential for fraud and cyber attacks. American and UK officials are fearful that algorithms will be used to curtail lending to minorities. While acknowledging the benefits of rapid technological advances to the overall economy, most are wary. 

One thing the lords of finance shouldn’t stress about is dilution of their power. Sure, the legions of Ph.D economists that staff central banks may thin. New algorithms that sift real-time data on everything from car sales to foot traffic at malls will rightly push analysts to think about how their roles will transform. But rather than make the men and women who actually set interest rates redundant, AI could make them mightier citizens. 

The Bank for International Settlements declared as much, saying that the most basic of tasks, deciding borrowing costs, will still be done by mortals. HAL, the computer that assumes God-like qualities in the film 2001: A Space Odyssey, isn’t coming for the Federal Open Market Committee and its global peers. “The ways we organize ourselves and our societies are that we like to hold human beings accountable,” Cecilia Skingsley, head of the Innovation Hub at the BIS, told reporters last month. “You know, changing politicians, possibly changing central-bank governors from time to time.”

She may be lowballing it. The importance of Federal Reserve Chair Jerome Powell and his cohort may only grow. As retailers develop applications to keep ever closer tabs on competitors and broader markets, the price of milk in Denmark, for example, may fluctuate during a press conference by Powell, argues Lars Christensen, an associate professor at the Copenhagen Business School. When OPEC raises or cuts oil production, that’s very quickly reflected in the price of gasoline at the roadside. Why shouldn’t the same apply to basic food staples, asks Christensen, cofounder of PAICE, a consulting firm specializing in AI and data analysis.

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“In many high-income countries, we already have electronic price tags,” he told me. “You might as well plug them into an algorithm. I don’t think my example of standing in a supermarket watching the price of milk change on the screen as Powell announces rates is unrealistic. For practical reasons, we might change the price only when the supermarket closes or you might have a mechanism that says the price can’t be increased while the customer is in the store. The concept is there.”(1)

Utterances from a generation ago can be resurrected to provide bond-market signals, thanks to a ChatGPT-based language model. JPMorgan Chase & Co. built a program that uses speeches dating back decades to detect the evolution of policy signals. The bank’s economists discovered that when the model showed a rise in inflation concern among Fed speakers between meetings, the following FOMC statement had grown more hawkish. The opposite is also true. Turn that into a trading strategy and the opportunities for a payday are plenty. Initially tracking the Fed, European Central Bank and Bank of England, JPMorgan expanded the method to 10 major developed-market central banks.

There’s always room for nuance and considered opinion. Sometimes the signals aren’t especially clear. For example, how do you interpret the Reserve Bank of Australia’s phrase du jour, “We aren’t ruling anything in or out?” A career Bundesbank policymaker might be less inclined to ease than, say, someone from the Bank of France. Bank of Japan Governor Kazuo Ueda can veer off on tangents. His predecessor delighted in surprising investors.   

AI works best when complementing human judgment. In some arenas, there is no substitute for experience. The machines helping reduce tax evasion in Turkey perform a public service, for example. Still, nobody would consider the country a gold standard for performance: Inflation is a stratospheric 72%. There needs to be a combination of electrons and brain waves.The employment mandate of central bankers themselves is unlikely to disappear. If Donald Trump wins this year’s presidential election, he’s pledged not to re-appoint Powell, who may not even want a third term. Safe to say HAL won’t make the shortlist —  this time.  

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(1) Christensen discussed the subject at length in George Mason University’s Macro Musings podcast last month.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Daniel Moss is a Bloomberg Opinion columnist covering Asian economies. Previously, he was executive editor for economics at Bloomberg News.

More stories like this are available on bloomberg.com/opinion

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Departing inspector general targets Council Office of Financial Analysis

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Departing inspector general targets Council Office of Financial Analysis

The $537,000-a-year office created in 2014 to advise the City Council on financial issues and avoid a repeat of the parking meter fiasco has failed to deliver on that mission, the city’s chief watchdog said Tuesday.

Days before concluding her four-year term, Inspector General Deborah Witzburg said a shortage of both adequate staff and financial information closely held by the mayor’s office prevents the Council’s Office of Financial Analysis from helping the Council be the the “co-equal branch of government” it aspires to be.

In a budget rebellion not seen since “Council Wars” in the 1980s, a majority of alderpersons led by conservative and moderate Democrats rejected Mayor Brandon Johnson’s corporate head tax and approved an alternative budget, including several revenue-generating items the mayor’s office adamantly opposed.

But Witzburg said the renegades would have been in an even better position to challenge Johnson if only their financial analysis office had been “equipped and positioned to do what it’s supposed to do” — provide the Council with “objective, independent financial analysis.”

“We are entering new territory where the City Council is asserting new, independent authority over the budget process. It can’t do that in a meaningful way without its own access to financial analysis,” Witzburg told the Chicago Sun-Times.

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Chicago Inspector General Deborah Witzburg’s latest report focuses on the Chicago City Council’s Office of Financial Analysis.

Jim Vondruska/Jim Vondruska/For the Sun-Times

But the Council’s financial analysis office, she added, “has never been equipped or positioned to do what it needs to do. It needs better and more independent access to data, and it needs enough staff to do its job. It has a small number of employees and comparatively limited access to data.”

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The inspector general’s farewell audit examined the period from 2015 through 2023. During that time, the financial analysis office budget authorized “either three or four” full-time employees. It now has a staff of five .

Witzburg is recommending a staffing analysis to identify how many people the financial office really needs — and also recommending that the office “get data directly” from other city departments, “ rather than having it go through the mayor’s office.”

The audit further recommends that the office develop “better procedures to meet their reporting requirements” in a timely manner. As it stands now, reports are delivered “sometimes late, sometimes not at all,” the inspector general said.

“We find that those reports have been both not timely and not complete in terms of what they are required to report on and that those reports therefore have provided limited assistance to the City Council in its responsibility to make decisions about the city’s budget,” she said.

The Council Office of Financial Analysis responded to the audit by saying it hopes to add at least three full-time staffers in the short term and has made “some progress” over the last three years in improving their access to data, but not enough.

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The office was created in 2014 to provide Council members with expert advice on fiscal issues.

For nearly two years the reform was stuck in the mud over whether former 46th Ward Ald. Helen Shiller had the independence and policy expertise to lead the office.

Shiller ultimately withdrew her name, but the office was a bust nevertheless. In an attempt to breathe new life into it, sponsors pushed through a series of changes.

Instead of allowing the Budget chair alone to request a financial analysis on a proposal impacting the city budget, any alderperson was allowed to make that request.

The office was further required to produce activity reports quarterly, not just annually.

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Now former-Budget Chair Pat Dowell (3rd) then chose Kenneth Williams Sr., a former analyst for the office, as director and gave him the “autonomy” the ordinance demanded.

Two years ago, a bizarre standoff developed in the office.

Budget Committee Chair Jason Ervin (28th) was empowered to dump Williams after Williams refused to leave to make way for a director of Ervin’s own choosing.

The standoff began when Williams said he was summoned to Ervin’s office and told the newly appointed Budget chair was “going in a different direction, and I’m putting you on administrative leave” with pay.

“He took all my credentials and access away. I would love to come to work. I wasn’t allowed to come to work,” Williams said then.

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Williams collected a paycheck for doing nothing while serving out the final days remainder of a four-year term.

Ervin’s resolution stated the director “may be removed at any time with or without cause by a two-thirds” vote or 34 alderpersons. He chose Janice Oda-Gray, who remains chief administrator.

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Reilly Barnes Returns to Little League® as Purchasing/Finance Assistant

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Reilly Barnes Returns to Little League® as Purchasing/Finance Assistant

Little League® International has announced that Reilly Barnes accepted a new role as Purchasing/Finance Assistant, effective April 6, 2026. Barnes transitions from a temporary Purchasing Assistant to this full-time position to assist in the year-round demands of purchasing for the organization, as well as the region and Little League Baseball and Softball World Series tournaments. 

“We are thrilled to welcome back Reilly to our team as a full-time Purchasing/Finance Assistant. Reilly’s prior experience, time management, and attention to detail make him an invaluable asset to the purchasing team,” said Nancy Grove, Little League Materials Management Director. “We look forward to the positive contributions he will have on our organization.” 

In this role, Barnes will be responsible for processing purchase requisitions, coordinating souvenir products, and tracking order fulfillment. He will also assist with evaluating suppliers, reviewing product quality, and negotiating contracts for effective operations.  

After most recently working as a Logistician Analyst at Precision Air in Charleston, South Carolina, Barnes, a Williamsport native, returns after honing his skills in the fast-paced environment. Prior to his time at Precision Air, Barnes served as a Procurement Specialist at The Medical University of South Carolina, where his expertise and knowledge were instrumental in supporting both education and healthcare needs.  

“I am thrilled to return to Little League in this full-time role,” said Barnes. “Coming back to my hometown and having the opportunity to work for an organization that has played such a special part of my upbringing means a lot. I can’t wait begin this new opportunity.” 

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Barnes graduated from the University of Pittsburgh in 2022 with a B.A. in Supply Chain Management, Finance, and Business Analytics.  

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Finance

Why this sleepy Swiss town has become a ‘bolt-hole’ for the Gulf elite

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Why this sleepy Swiss town has become a ‘bolt-hole’ for the Gulf elite

As conflict continues to destabilise the Middle East, the Gulf States elite are seeking solace in European alternatives that offer comparable financial benefits with a far lower risk of war on the doorstep. One such destination is the small Swiss town of Zug, which is becoming a “bolt-hole” for Gulf-based wealth, said the Financial Times.

‘Swiss Monaco’

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