AI poses systemic risks, Europe needs resilience and competitiveness
Olli Rehn, Governor of the Bank of Finland, highlighted the systemic risks and opportunities of artificial intelligence. He emphasized the need for Europe to strengthen its resilience and competitiveness in a rapidly changing technological and geopolitical landscape.
AI's dual nature: Opportunities and cyber threats
Artificial intelligence and related technologies present major opportunities but also significant risks, particularly for financial stability.
Operational resilience is becoming a central pillar, as AI-powered cyberattacks grow more sophisticated and scalable, exploiting vulnerabilities faster than ever.
Dependence on a few dominant technology providers creates concentration risks, and large-scale cyber incidents could erode public trust.
Financial authorities must remain vigilant, ensuring innovation does not outpace risk management capabilities, especially for banking and payment systems.
The race between attackers and defenders intensifies, requiring constant investment in technology, cybersecurity, and skilled personnel.
Evolving systemic risks and labor market shifts
Systemic shocks increasingly originate beyond the traditional financial sector, driven by geopolitical tensions, technological disruption, and climate-related risks.
Financial stability authorities must broaden their assessment to include these interdependencies and cross-border vulnerabilities, as recommended by the High-Level Group on the ESRB Review.
Policy-relevant research and close cooperation are crucial to keep pace.
AI's impact on the economy and labor market is also profound.
While AI can boost productivity, it also threatens to replace tasks and jobs, potentially leading to unemployment and inequality if societies fail to adapt through education, training, and organizational reform.
Finland, for instance, faces significant adjustment pressures.
Europe's strategic imperative
Europe must focus on fostering entrepreneurship, smarter regulation, deeper capital markets, and human capital to navigate the technological shift.
The benefits of artificial intelligence are not automatic, demanding strategic investments in skills, resilience, innovation, and trust.
The future must be actively built through collective effort, not merely allowed to unfold.