Yellen Highlights AI Risks and Opportunities in Finance

Treasury Secretary Janet Yellen warns that while AI offers significant opportunities for the financial sector, it also poses substantial risks. In her speech at a financial stability conference, Yellen highlights concerns such as the complexity and opacity of AI models, inadequate risk management frameworks, and potential biases in financial decision-making. She emphasizes the need for regulators to monitor AI's impact on financial stability and suggests using scenario analysis to understand future vulnerabilities.