Securities and Exchange Commission (SEC) chair Gary Gensler said Sunday that a financial crisis caused by artificial intelligence is “nearly unavoidable.”
Gensler said that if there is no regulation to mitigate the threats and chaos posed by AI, there will be a “nearly unavoidable” financial crisis within the decade, according to the Financial Times. But shaping AI regulations is not going to be an easy thing to do, especially given the inherent risks of depending on such a potentially flawed system.
“It’s frankly a hard challenge,” Gensler told the outlet. “It’s a hard financial stability issue to address because most of our regulation is about individual institutions, individual banks, individual money market funds, individual brokers; it’s just in the nature of what we do. And this is about a horizontal [matter whereby] many institutions might be relying on the same underlying base model or underlying data aggregator.”
We Thought We Heard Insane Debt Stories, But Nothing Tops This | @DailyCaller
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— KAY SMYTHE (@KaySmythe) April 13, 2023
In layman’s terms, Gensler is concerned that hindsight will show us that AI is responsible for a financial crisis that hasn’t happened yet. (RELATED: The COVID Recession Is Here. And It’s Exactly What We Warned You About)
“I do think we will in the future have a financial crisis . . .[and] in the after action reports people will say ‘Aha! There was either one data aggregator or one model . . . we’ve relied on.’ Maybe it’s in the mortgage market. Maybe it’s in some sector of the equity market,” Gensler noted.
It’s quite nice to hear someone sound confident that our nation will have any financial future at all after this decade. I’m fairly convinced whatever happens next to our economy will be so much worse than 2008, I’m unsure how many of us will be left by the late 2020s or early 2030s, when Gensler says all this is going to go down.