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Comparing minds and machines: implications for financial stability

Author

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  • Marcus Buckmann
  • Andy Haldane
  • Anne-Caroline Hüser

Abstract

Is human or artificial intelligence more conducive to a stable financial system? To answer this question, we compare human and artificial intelligence with respect to several facets of their decision-making behaviour. On that basis, we characterize possibilities and challenges in designing partnerships that combine the strengths of both minds and machines. Leveraging on those insights, we explain how the differences in human and artificial intelligence have driven the usage of new techniques in financial markets, regulation, supervision, and policy-making, and discuss their potential impact on financial stability. Finally, we describe how effective mind–machine partnerships might be able to reduce systemic risks.

Suggested Citation

  • Marcus Buckmann & Andy Haldane & Anne-Caroline Hüser, 2021. "Comparing minds and machines: implications for financial stability," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 37(3), pages 479-508.
    • Handle: RePEc:oup:oxford:v:37:y:2021:i:3:p:479-508.
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    File URL: http://hdl.handle.net/10.1093/oxrep/grab017
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    Citations

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    Cited by:

    1. Karolis Liaudinskas, 2022. "Human vs. Machine: Disposition Effect among Algorithmic and Human Day Traders," Working Paper 2022/6, Norges Bank.
    2. Chmielewska Anna & Sławiński Andrzej, 2021. "Climate crisis, central banks and the IMF reform," Economics and Business Review, Sciendo, vol. 7(4), pages 7-27, December.

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