Bank of England Official Advocates Flexible Regulation in Response to AI Disruption

A Bank of England (BoE) policymaker highlighted the dual nature of artificial intelligence (AI) as both a potential disruptor and a driver of productivity within Britain’s economy. Randall Kroszner, a member of the BoE’s Financial Policy Committee, emphasized the necessity for regulators to adopt adaptable approaches to rule-making in light of AI’s transformative potential.

Unlike the European Union’s proactive stance in formulating specific regulations for AI, Britain has thus far pursued a cautious approach. Kroszner underscored the need for a regulatory framework that fosters innovation while mitigating potential risks to financial stability.

Acknowledging the inherent challenges posed by disruptive innovation, Kroszner advocated for regulators to remain receptive to novel regulatory approaches that align with evolving technological landscapes.

In response to the rapid scaling potential of AI technologies like ChatGPT, Kroszner questioned the applicability of conventional regulatory methods such as the “digital securities sandbox.” He suggested that policymakers may need to innovate further to effectively address the impacts of disruptive changes.

Kroszner emphasized the importance of regulators maintaining vigilance and actively seeking to enhance their understanding of AI, advocating for a collaborative and informed approach to regulation.

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