Europe’s leading bankers and financial regulators are warning that artificial intelligence is advancing faster than existing regulations can keep pace. Speaking at the European Central Bank’s annual forum in Portugal, ECB President Christine Lagarde and Nikhil Rathi, head of the UK’s Financial Conduct Authority (FCA), stressed that more flexible regulation is needed. The goal is to safeguard the stability of financial markets without slowing innovation.
Regulators are particularly concerned that autonomous AI systems could increase market volatility and introduce new risks. As a result, they are considering stricter rules, closer international cooperation and stronger intervention powers to encourage the responsible use of AI.