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
France's Financial Markets Authority urges regulated firms to strengthen cyber resilience against AI-driven threats
The France Autorité des marchés financiers has made cyber resilience a strategic priority in its 2026 action plan, warning that advances in artificial intelligence can accelerate exploitation of vulnerabilities and scale malicious campaigns. It will supervise compliance with the Digital Operational Resilience Act for portfolio management companies, crypto-asset and crowdfunding service providers and market infrastructures, and expects firms to strengthen cyber risk frameworks, governance and testing. The authority plans further awareness actions, surveys and inspections in 2026, and will publish a first review of major incidents after the European Supervisory Authorities issue their report.
Spanish Securities Commission publishes first semiannual bulletin on war in Iran market effects and uneven AI adoption by investment service providers
The Spanish Securities Commission (CNMV) published its first semiannual bulletin of 2026, reporting that early-year market gains reversed into sharp equity declines and higher volatility after the outbreak of war in Iran, while bond yields rose but risk premia and the financial system remained stable. The bulletin notes more moderate effects in Spain, continued growth in collective investment with a shift toward fixed income, and rising relevance of specialist non-bank advisory firms. It also includes research warning of material errors from unsupervised use of large language models in investment, analysing Euribor’s post-reform role, and documenting uneven but growing AI adoption among Spanish investment service providers.
European Central Bank warns frontier AI is reshaping cyber risk and will send banks a dear CEO letter
The European Central Bank’s Frank Elderson warned that frontier artificial intelligence models are reshaping cyber risk and urged banks to treat operational resilience as a firm-wide strategic priority, announcing a forthcoming dear CEO letter calling for proactive measures to keep systems robust and secure. He noted vulnerabilities revealed by the 2024 cyber resilience stress test despite existing response and recovery frameworks and said almost three-quarters of findings have been addressed. Elderson underscored the role of the Digital Operational Resilience Act and said the ECB will follow up with banks in a targeted way, using its system-wide view to identify areas of attention and good practices, particularly for smaller banks.
Hong Kong Securities and Futures Commission urges licensed firms to strengthen cybersecurity against frontier AI enabled threats
The Hong Kong Securities and Futures Commission has issued a circular urging licensed firms, especially internet brokers and virtual asset trading platforms, to strengthen cybersecurity in response to emerging threats from frontier AI models. Citing rising cyber incidents and increasingly sophisticated AI-enabled attacks, the SFC calls for enhanced patching and vulnerability management, detection and monitoring, and incident response and recovery. It reiterates that senior management is primarily responsible for cyber resilience and will increase supervisory engagement, thematic reviews and enforcement where necessary.
Finland's Ministry of Finance appoints working group to assess legal framework and law changes for consent-based data sharing
Finland’s Ministry of Finance has appointed a working group to assess the legal framework for expanding consent-based information disclosure and determine whether legislative changes are needed to strengthen individuals’ control over their data. The group will examine legal boundaries for consent management in public administration, identify development needs, consider the role of technologies including artificial intelligence, and explore alternative statutory disclosure models linked to broader digitalisation initiatives.
Japan Financial Services Agency publishes minister remarks that some Japanese financial institutions have been granted access to OpenAI GPT-5.5-Cyber
The Japan Financial Services Agency reported that Minister of Finance Katayama announced OpenAI, in coordination with the United States government, will grant selected Japanese financial institutions access to its frontier AI model GPT-5.5-Cyber as a cybersecurity measure. Katayama said access for a few major institutions is already underway, while discussions continue on other frontier AI systems and any broader rollout beyond currently trusted institutions, and noted the government will review reports that Anthropic may release comparable technology.
Central Bank of Russia identifies soft regulation and trusted data platforms as priorities for AI in finance
The Central Bank of Russia identified soft regulation and trusted data-sharing platforms as its main priorities for developing artificial intelligence in the financial market, while maintaining technology neutrality and a cross-sectoral regulatory framework. It will draft proposals for regulating data-sharing platforms, remove barriers to privacy-enhancing technologies, compile best practices for complying with the Ethics Code for Artificial Intelligence in Finance in 2026, and continue monitoring AI use with other agencies and market participants.
Portuguese Securities Commission examines technology-led capital market change and investor protection
The Portuguese Securities Commission’s annual conference examined how technological innovation could reshape capital markets in Portugal and the European Union. Discussions covered artificial intelligence, distributed ledger technology, investor protection and the regulatory implications for supervised entities.
Central Bank of Ireland publishes Financial Stability Review warning intensified global risks could hit Ireland’s financial system
The Central Bank of Ireland’s latest Financial Stability Review finds that risks to Ireland’s financial system from the global environment have intensified, driven by a persistent global energy supply shock, potential financial market corrections, vulnerabilities in parts of the global non-bank sector and rising cyber risks. Prolonged energy disruption could raise inflation, slow growth and increase costs for households and businesses, while high valuations and debt-funded investment in the artificial intelligence sector and greater use of private credit add to vulnerabilities. The review stresses the need to maintain strong bank capital buffers, prudent lending standards and operational resilience, and notes that public finances remain exposed due to reliance on corporation tax-driven surpluses.
European Central Bank research flags euro area fund vulnerability to reversals in highly valued US tech and AI equities
The European Central Bank’s Financial Stability Review warns that stretched valuations in US technology and artificial intelligence equities are a key financial stability vulnerability for the euro area, given investors’ growing exposures via investment funds. Euro area holdings of US equities have quadrupled over the past decade, with about 70% of the increase driven by valuation effects, and flows into US technology funds are highly sensitive to macroeconomic, monetary policy and risk shocks. The ECB cautions that weaker-than-expected AI outcomes or worsening geopolitics could trigger outflows, forced asset sales and spillovers to euro area corporate funding and household wealth.
Australian Securities & Investments Commission outlines a more hands on sandbox model for financial startups
ASIC Chair Joe Longo signalled an ambition to make ASIC’s regulatory sandbox more supportive, including a clearer path from innovation to licensing and closer coordination with the Reserve Bank of Australia and other regulators. He said rapid advances in artificial intelligence, payments and digital assets require regulators to deepen their technology capabilities while applying existing law, and noted ASIC has been addressing its technology debt and expanding its use of AI tools.
Federal Reserve Board Governor Cook says rates should stay steady and flags AI-driven inflation and stability risks
Federal Reserve Governor Lisa D. Cook said elevated risks to inflation and employment argue for holding rates steady, noting risks still tilt toward higher inflation and she is prepared to raise rates if disinflation stalls or ease if the labor market weakens. She said artificial intelligence (AI) investment could add to price pressures and labor-market churn even as it boosts productivity in financial services, and warned AI may amplify financial stability risks. Cook outlined how the Fed is using AI in financial-stability analysis, including new technology-risk teams, smaller AI models, and systemwide agentic AI experiments.
Dutch Central Bank identifies cyber and operational risks from AI and geopolitics as major threats while banks remain resilient in war stress test
De Nederlandsche Bank’s semiannual Financial Stability Overview flags cyber and operational risks, driven by rapid advances in artificial intelligence and heightened geopolitical tensions, as a major threat to financial stability, with geo-economic fragmentation and prolonged higher energy prices remaining key risk drivers. Stress tests indicate Dutch banks can absorb losses from a Middle East conflict escalation within existing capital buffers, while the bank also highlights rising private credit exposures of large insurers and rapid global stablecoin market growth as emerging vulnerabilities.
Oman Financial Services Authority identifies three critical vulnerabilities in OpenClaw autonomous AI agents system
The Oman Financial Services Authority identified and reported three critical vulnerabilities in the OpenClaw autonomous AI agents system. The flaws were validated and published as CVE-2026-44109, CVE-2026-43527 and CVE-2026-43582, with the authority warning they could be exploited to compromise systems and enable unauthorized actions.
South Korea Financial Services Commission launches phased easing of network separation rules for AI cybersecurity at 49 large financial companies
South Korea’s Financial Services Commission announced measures to address cyber risks from advanced AI in finance, centred on phased easing of network separation rules so eligible firms can use AI and SaaS cybersecurity tools. It will grant one-year relief via no action letters to large institutions that pass expert screening, require vulnerability test reporting, and may fully lift network separation through the regulatory sandbox. The commission will also issue AI cybersecurity guidelines in June 2026.
International Organization of Securities Commissions publishes AI supervisory toolkit for capital markets supervisors and opens industry survey to 26 June
The International Organization of Securities Commissions has published a non-binding Supervisory Toolkit for AI Use in Capital Markets to guide securities regulators in risk-based oversight of AI systems across their lifecycle, including traditional machine learning, generative AI and agentic AI. The toolkit identifies key AI risk areas, sets out supervisory tools for governance, third-party risk, disclosure and recordkeeping, and provides indicators and engagement methods for monitoring AI adoption. IOSCO will next review emerging industry practices in AI governance, disclosure and recordkeeping and will continue coordinating on AI developments with other international bodies, including the Financial Stability Board.
Japan Financial Services Agency requests short-term Frontier AI measures from financial institutions and outlines May 25 Business Financing Promotion Act rollout
The Japan Financial Services Agency outlined short-term expectations for supervised financial institutions to address evolving Frontier AI-related vulnerabilities, including treating AI risk as a management issue and strengthening systems for rapid security patch releases. It also highlighted the start of the Business Financing Promotion Act, which aims to shift lending toward future business potential, establish a headquarters to promote business-oriented lending, and support financing for startups, business succession and revitalization, with 20 institutions reporting 26 initiatives using corporate value collateral.
South Korea Ministry of Economy and Finance discusses Korea EBRD AI Hub follow-up and seeks stronger Korean role in EBRD projects
South Korea’s Ministry of Economy and Finance said Second Vice Minister Huh Jang met European Bank for Reconstruction and Development First Vice President Greg Guyett to discuss follow-up on establishing a Korea-EBRD artificial intelligence hub and to call for close coordination to accelerate its launch. Huh also sought EBRD support for greater Korean participation in power infrastructure investments, expanded Korean staffing, and broader cooperation under South Korea’s global AI hub plan with other multilateral development banks.
Japan Financial Services Agency and Bank of Japan request short term responses by financial institutions to frontier AI threats
The Japan Financial Services Agency and the Bank of Japan have requested financial institutions and related entities to take short-term measures in response to threats posed by frontier artificial intelligence. The authorities are seeking immediate risk-mitigation actions from the sector.
South Korea's Ministry of Economy and Finance advances AI Hub cooperation with Inter-American Development Bank to support Korean firms in Latin America
South Korea’s Ministry of Economy and Finance and the Inter-American Development Bank held their annual consultation on bilateral cooperation, focusing on operationalising the new AI Hub and broader support for Korean firms entering Latin America. They highlighted complementary demand and capabilities in artificial intelligence, digital and energy sectors, discussed deeper cooperation on AI projects, trust funds, co-financing, private investment and critical minerals, and agreed to work toward the Korea-Latin America Business Forum in Buenos Aires to advance Korean AI companies’ regional expansion.
European Central Bank publishes research linking AI architecture to different financial stability risks
The European Central Bank published research analysing how different AI architectures may affect financial stability using a stylised mutual fund redemption game. Q-learning systems tend to coordinate on bank run-like mass redemptions due to a “hot stove” effect, while large language models generate more heterogeneous, less predictable decisions. Noisy private signals align beliefs but do not materially alter Q-learning behaviour. The authors highlight implications for investor protection, firms’ risk management and market design, and stress that the views expressed do not necessarily represent the ECB, Deutsche Bundesbank or the Eurosystem.
The Pensions Regulator publishes AI plan setting governance expectations for trustees and scheme managers
The Pensions Regulator has published an artificial intelligence plan setting expectations for how pension trustees and scheme managers should govern AI use, emphasising that accountability for outcomes remains with them even where activities are delegated or AI-supported. Pending fuller guidance, schemes should establish clear AI governance, test and monitor systems, review risks and controls, strengthen data and data protection, and protect members from AI-enabled fraud, while TPR aligns with the Financial Conduct Authority and expands its own AI use.
Monetary Authority of Singapore launches Young Talent Programme for AI in Finance and expands pathways into financial sector jobs
The Monetary Authority of Singapore launched a Young Talent Programme for AI in Finance and broader measures to strengthen education-to-work pathways in the financial sector, focusing on structured industry exposure and AI skills development. The pilot, developed with Singapore Management University and Nanyang Technological University and involving around 20 financial institutions, will offer applied AI projects, mentoring and credit-bearing curricula, while MAS and the Institute of Banking and Finance work with industry to expand work-study pathways and over 1,000 graduate internship and traineeship positions.
Sweden's Riksbank says AI has not yet affected current monetary policy and flags tougher labour market entry for young workers
The Riksbank published a speech by First Deputy Governor Aino Bunge on how artificial intelligence could affect the labour market, macroeconomy and monetary policy, concluding that AI has not yet materially influenced productivity or policy but warrants close monitoring. Bunge highlighted a “no hire, no fire” pattern in AI‑exposed jobs and noted that firms’ AI use is widespread but operational effects remain limited. She also said the war in the Middle East has raised energy and fertiliser prices and will lift inflation relative to baseline, but argued against a pre‑emptive monetary policy response given low inflation and the credibility of the inflation target.
United Kingdom's Financial Conduct Authority, Bank of England and HM Treasury reinforce cyber resilience steps for firms facing frontier AI threats
The Financial Conduct Authority, Bank of England and HM Treasury issued a joint statement warning that frontier artificial intelligence models materially increase cyber risk for regulated firms and financial market infrastructures, reiterating that firms must address these risks under existing operational resilience requirements. The authorities highlight expectations around governance, vulnerability management, third-party risk, protection, and response and recovery, and direct firms to cyber resilience practices and guidance from the Cross Market Operational Resilience Group and the National Cyber Security Centre.