Bank for International Settlements: "Central Banks Worldwide Must Urgently Enhance AI Capabilities"

The Bank for International Settlements (BIS) stated on the 25th (local time) that central banks worldwide urgently need to enhance their capabilities to cope with artificial intelligence (AI), which is transforming the economy and financial systems.

In a report released that day, BIS emphasized, “The rapid spread of AI means that strengthening the capabilities of central banks is urgent,” and “Central banks must upgrade their capabilities both as informed observers of the effects of technological advancements and as users of the technology itself.”

BIS noted that if central banks adopt AI, nowcasting of economic recessions could improve. It also analyzed that AI could help better identify systemic risks faced by financial markets and more effectively track illegal money laundering occurring in transactions of individual financial institutions.

Central banks in European countries are actively adopting AI. The Bank of England (BOE), the central bank of the United Kingdom, announced that it adopted AI this year to predict economic growth, banking sector distress, and financial crises. The European Central Bank (ECB), the central bank of the European Union (EU), is using AI for drafting briefing documents, summarizing bank data, writing software code, and translating documents.

The U.S. Federal Reserve (Fed) is not currently considering the use of AI in any policy work but has begun investigating how it might be utilized.

BIS predicted that even if AI is widely adopted within central banks, the decision on benchmark interest rates will remain the responsibility of monetary policymakers.

BIS also forecasted that the rise of AI could expose central banks to risks. Hacker attacks and misinformation are representative examples. BIS emphasized that sharing experiences, tools, and data among central banks is important to prevent these risks.