I'm very happy to share a new article — "In Defense of the Second Line of Defense: The Role of Independent Risk Management" — just published in the 2023 Starling Compendium.
To access, click through, choose join, and "Observer Status" (which is free). https://t.co/n0mr5ckmmp
"Respondents identified a broad range of AI‑related risks to their own operations, but three risk categories dominate: data quality and bias, cyber security and data privacy, model risk or lack of explainability." — Bank of Canada, Financial System Survey Highlights https://t.co/qyHPPvR3XC
"Agentic AI systems offer powerful automation benefits, but their ability to act autonomously across interconnected tools, data and environments introduces security risks that extend beyond those associated with traditional software or GenAI."
https://t.co/EhQfxXGqkh
"Human oversight [:] AI should support cyber defenders, not replace human judgment, particularly where decisions could affect high consequence cyber or safety environments."
https://t.co/9YeYybl4W6
"AI governance gaps persist everywhere In every sector and jurisdiction, the deployment of AI-driven decision systems has outpaced governance frameworks. ... no jurisdiction has fully resolved how existing regulatory obligations apply to automated decisions." https://t.co/LsrLbFFqSy
"...responsible adoption of tokenisation in the UK can enhance financial stability and support sustainable growth – not only in retail payments but also, especially given this audience, in financial markets and the services they provide to the UK and global economies."
https://t.co/aA6a275C0l
"The totality of our experience with AI leads us to the conclusion that, alongside experimentation, strong governance and risk management must be our foundation. The most promising approaches augment human judgment with AI capabilities while building verification into the architecture itself."
The Opportunities and Risks AI Presents for the Economy and Financial System https://t.co/ZwlOSyBatB via @FederalReserve
"Tokenisation using blockchain technology can significantly enhance cross border payment workflows. The prototype shows how processes that are traditionally fragmented can be integrated, enabling the coordinated crediting and debiting of multiple accounts" https://t.co/G080i8y71z via @bis_org
"Artificial intelligence (AI) is being adopted rapidly across all regulated industries, creating opportunities for efficiency and innovation. However, governance arrangements have not matured at the same pace. APRA has recently reinforced its expectations for sound AI governance and risk management via a letter to industry." https://t.co/8eg4ha9Dqo
"This report responds to that need by providing IOSCO member authorities with a supervisory toolkit to support risk-based and proportionate oversight of AI systems used by supervised firms." Link: https://t.co/4dceJtGFw8
FDIC Board Approves Proposal to Address Bank Secrecy Act and Sanctions Compliance Standards for FDIC-Supervised Permitted Payment Stablecoin Issuers https://t.co/TGpjDAMkuP https://t.co/ZFudrCQUSA via @FDICgov
Federal Reserve Board requests public comment on a proposal to establish a "payment account," which legally eligible financial institutions could use for the specific purpose of clearing and settling their payments https://t.co/j0jAA8z92A via @FederalReserve
"The progress report highlighted the process of the ABIF [ASEAN Banking Integration Framework] review based on three (3) fundamentals, namely:
(i) institutional arrangements;
(ii) flow of services to include cross-border digital financial services; and
(iii) regulatory considerations for financial stability and resilience.
…
The Meeting noted the progress of the study on the approach to monitor AMS’ progress in meeting the G20 cross-border payment targets on cost, speed, transparency and access and looked forward to the deeper analysis to explore how local currency transactions can lower the cost of cross-border payments."
https://t.co/3F255vAW82