Gensler Warns Artificial Intelligence Risks Financial Stability

Wall Street’s top regulator says the proliferation of artificial intelligence means governments will probably have to overhaul regulations to maintain global financial stability.

Regulators must grapple with challenges posed by the burgeoning technology, according to US Securities and Exchange Commission Chair Gary Gensler. He also reiterated that the agency’s staff was weighing whether new rules were needed.

“AI may heighten financial fragility as it could promote herding with individual actors making similar decisions because they are getting the same signal from a base model or data aggregator,” he said in remarks prepared for a speech on Monday before the ...