What's new
Overview
This deep dive examines the latest developments in artificial intelligence, including emerging adoption patterns, key risk watch points, evolving policy and supervisory guidance, and research on the economic impact of AI.
What's new
European Supervisory Authorities identify external dependencies, cyber threats and private credit as key EU financial vulnerabilities
The European Supervisory Authorities identified non-EU dependencies, cyber and emerging technology threats, and private credit as key vulnerabilities, while assessing the EU financial system as resilient overall. They called for stronger crisis preparedness, monitoring and stress testing of external and private credit exposures, and early action on risks from artificial intelligence and quantum computing.
Danish Financial Supervisory Authority sets 2030 technology agenda for AI, quantum risks, tokenization and innovation
The Danish Financial Supervisory Authority has set a technology agenda through 2030 covering AI, quantum technology, tokenization and financial innovation. It will assess emerging risks, clarify existing requirements and consider expanding its FT Lab regulatory sandbox, with the aim of supporting innovation without adding unnecessary rules or weakening financial stability and customer protections.
U.S. Senate Committee on Banking, Housing and Urban Affairs ranking member presses Trump to seek China AI restrictions and exclude NVIDIA CEO from talks
U.S. Senate Banking Committee Ranking Member Elizabeth Warren urged President Donald Trump to exclude NVIDIA CEO Jensen Huang from upcoming talks with Chinese President Xi Jinping. She also called on Trump to seek Chinese restrictions on dangerous uses of advanced AI and said Huang will be called before Congress in 2027.
Financial Planning Standards Board announces 10th World Financial Planning Day and AI research release
The Financial Planning Standards Board will hold the 10th World Financial Planning Day on Oct. 7, 2026, with education and pro bono activities across 11 markets. It will also release global research on how consumers and financial planners use artificial intelligence, including the role of professional judgment and ethical responsibility.
Portuguese Insurance and Pension Funds Supervisory Authority reports stronger 2025 insurer earnings and solvency alongside pension fund growth
The Portuguese Insurance and Pension Funds Supervisory Authority reported a 14.3% rise in supervised insurers’ production, net profit of EUR 653 million and Solvency Capital Requirement coverage of 211% in 2025. Pension fund assets grew 2.9% to EUR 19.9 billion, while contributions rose 43.7% and defined benefit funding levels improved. Market volatility, catastrophe protection gaps and digital operational risks remain key concerns.
European Central Bank Banking Supervision calls for board oversight of bank digital strategies and stronger risk safeguards
European Central Bank Supervisory Board Chair Claudia Buch called for board oversight, multiyear investment and strong risk controls as banks expand their use of artificial intelligence, cloud services and tokenisation. Supervision will focus on common cyber, outsourcing and data vulnerabilities while holding banks accountable for automated decisions. Buch also backed integrated European markets and interoperable public infrastructure without weakening prudential standards.
European Central Bank assesses AI boom support for US equities and rising concentration risks
The European Central Bank finds that strong earnings expectations and compressed risk premia have supported US equities and limited their sensitivity to adverse shocks during the AI boom. Widening risk differentiation among technology companies and historically high market concentration increase the risk that weakness in a few large AI related stocks could trigger broader declines.
US Commodity Futures Trading Commission launches Frontier Forum Series on emerging financial technologies
The US Commodity Futures Trading Commission will hold public roundtables on emerging financial technologies and market structures. The first forum, focused on artificial intelligence and agentic finance, is scheduled for Oct. 28, 2026.
New York State Department of Financial Services sets November registration for frontier AI developers under RAISE Act
The New York State Department of Financial Services will begin directing large frontier AI developers to register in November 2026, ahead of RAISE Act compliance from January 2027. Covered developers must publish safety frameworks, report critical incidents within 72 hours and submit quarterly catastrophic-risk assessments to the new DIGIT office. Marc Gilman has been appointed deputy director for the law’s implementation.
Poland's Ministry of Finance backs EU windfall tax and outlines priorities for banking innovation and AI
Poland's Ministry of Finance backed an EU windfall tax on oil companies, with proceeds potentially used to reduce energy and fuel costs for vulnerable households and businesses. At an informal EU finance ministers' meeting, Poland also supported deeper banking integration, safeguards for cryptoasset risks and investment in domestic AI capabilities and public-sector applications.
International Monetary Fund Managing Director Kristalina Georgieva urges five policy priorities for Europe’s AI push and warns of market correction risks
International Monetary Fund Managing Director Kristalina Georgieva urged Europe to accelerate its AI strategy through deeper risk capital markets, energy integration, business flexibility, workforce support and digital public infrastructure. She warned that leverage, circular financing and global equity linkages could turn disappointment over AI earnings or investment into a broad market correction. AI could eventually lift global annual potential growth by 0.1 to 0.8 percentage points but affect up to 60% of jobs in advanced economies.
Bank of Canada assesses AI’s potential effects on productivity, employment and inflation
The Bank of Canada says AI could raise productivity and living standards, but the timing, scale and distribution of the gains remain uncertain. AI may reshape tasks and disrupt some jobs, while its limitations mean human oversight remains necessary. The Bank will monitor the transition while aiming to keep inflation at or around 2%.
Bank for International Settlements’ Fernando Restoy calls for broader bank supervision covering AI governance and resilience
Fernando Restoy, Chair of the Bank for International Settlements’ Financial Stability Institute, called for bank supervision to extend beyond AI governance to operational and strategic resilience. Supervisors should update model risk management expectations, test faster cyber response and recovery, and assess how AI-driven economic change could affect borrowers, portfolios and bank business models.
Hong Kong Securities and Futures Commission Chairman Kelvin Wong calls on boards to establish accountable AI governance
Hong Kong Securities and Futures Commission Chairman Dr Kelvin Wong called on boards to retain human accountability for AI and treat its use as a governance duty rather than an IT project. Directors should build AI literacy, establish firmwide controls and ownership, and scrutinize investment returns, risks, performance and incidents. He highlighted a wide gap between issuers’ AI disclosures and the adoption of structured governance frameworks.
National Bank of Denmark working paper finds AI adopters' employment growth 11% lower by late 2025
A National Bank of Denmark working paper finds that 2023 AI adopters recorded employment growth 11% below trend relative to non-adopters by late 2025. The shortfall was concentrated in firms with fewer than 100 employees and resulted from lower hiring, particularly in AI-exposed occupations. Economy-wide employment and wages remained relatively unaffected.
National Bank of Denmark finds AI adoption is slowing firm level employment growth without reducing total employment
The National Bank of Denmark finds that AI adopting firms have reduced employment growth mainly through fewer hires, particularly among younger and more highly educated workers. Total employment and wages show no clear effects, suggesting displaced hiring has been absorbed elsewhere. The central bank’s baseline projection assumes no aggregate employment impact over the next two to three years, although risks run in both directions.
Organisation for Economic Co-operation and Development finds agentic AI entering operational workflows as governance gaps persist
The Organisation for Economic Co-operation and Development finds that agentic AI is entering operational workflows, particularly for structured tasks with verifiable outcomes and bounded risks. Organisations are using limited autonomy, human approval checkpoints and layered technical safeguards. Evaluation, cybersecurity, traceability and cross-organisational accountability remain underdeveloped.
European Central Bank President Christine Lagarde calls for deeper capital markets to finance sovereign AI capacity
European Central Bank President Christine Lagarde called for deeper European capital markets to finance AI computing capacity, open models and access to frontier technology. She said rapid AI adoption could lift productivity by up to 4% over a decade, while closing Europe’s data center gap could cost as much as EUR 600 billion. The speech positions AI as a central purpose for the savings and investments union and warns supervisors to prepare for possible spillovers from a correction in US technology markets.
Monetary Authority of Singapore urges stronger AI governance and cyber defenses as financial sector adoption scales
The Monetary Authority of Singapore urged financial institutions to strengthen AI governance and cyber defenses as adoption expands beyond pilots. Pathfin.ai now has more than 300 participants, while cross-bank AI testing for scam detection is expected to produce findings by the end of 2026. MAS also warned of a sixfold rise in high-severity vulnerabilities and called for stronger multilayered defenses supported by AI.
European Securities and Markets Authority identifies rising correction and cyber risks despite resilient markets
The European Securities and Markets Authority warned that elevated technology valuations and strong investor optimism are increasingly detached from weaker economic conditions and geopolitical risks, raising the prospect of an abrupt market correction. Operational risks are also rising as frontier artificial intelligence intensifies cyber threats, while growing U.S. equity concentration leaves EU investors more exposed to a repricing.
UAE Cabinet reviews second phase Agentic AI strategy and FedAI government ecosystem
The UAE Cabinet’s Ministerial Council for Artificial Intelligence and Development reviewed the second phase strategy for expanding agentic AI across the federal government. Planned initiatives include the secure FedAI technical ecosystem, a customer experience lab and government projects to be launched in the next phase.
Bank for International Settlements assesses frontier AI cyber threats and finds authorities reinforcing existing resilience frameworks
A Bank for International Settlements paper finds that frontier AI is accelerating cyber attacks by automating vulnerability discovery, exploitation and complex operations. Financial authorities are mainly reinforcing existing operational resilience frameworks, with greater emphasis on faster patching, stronger governance, recovery capabilities and oversight of critical third-party dependencies.
South Korea's Ministry of Economy and Finance sets four AI cooperation priorities for the Knowledge Sharing Program
The Ministry of Economy and Finance set four KSP cooperation priorities covering AI ecosystems, sector and energy transformation, specialized skills and international coordination. It also plans to focus projects on four strategic fields and connect policy advice more directly with development finance, multilateral bank projects and private investment.
Hong Kong Securities and Futures Commission considers agentic AI guidance and outlines offshore renminbi market expansion
Hong Kong Securities and Futures Commission Chief Executive Officer Julia Leung said the regulator is considering guidance to clarify governance and human oversight expectations for agentic AI. She also outlined measures to deepen Hong Kong’s offshore renminbi market, including southbound Stock Connect readiness for renminbi counters, a fixed income and currency trading platform, and wider collateral use by the end of 2026.
Bank of France finds generative AI use at 67% of French firms with at least 20 employees but limited productivity gains
The Bank of France found that 67% of French firms with at least 20 employees used generative AI in early 2026, mainly experimentally or in support functions. Productivity gains remain limited, though 60% of firms using or planning to use AI expect gains over the next three years. Firms also anticipate continued investment, modest employment reductions and no significant fall in selling prices.