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Exploring the impact of AI in the Financial sector
Exploring the impact of AI in the Financial sector - with Jonathan Hall, Bank of England
11 June 2025 1pm - 2.30pm, online
Recent advances in the capabilities of AI models raise the question of whether their use in finance could have an impact on financial stability. In this session Jonathan Hall of the Bank of England will conduct an extended thought experiment, which aims to answer two questions: First, is it theoretically possible for neural networks to be used to create what might be called 'deep trading agents', which select and execute trading strategies? Jonathan will argue that the answer is yes. And, if this is right, what are the implications for market stability?
Jonathan will highlight two risks:
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That deep trading agents, while increasing efficiency in good times, might lead to an increasingly brittle and highly correlated financial market.
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That the goals of deep trading agents could become misaligned with that of regulators and the public good.
Both of these risks could amplify shocks and reduce market stability.
Jonathan will offer some thoughts on how to mitigate these risks, touching on testing, responsibility attribution, and the regulatory framework. AI in general, and deep learning in particular, has the the potential to be incredibly powerful, including in the Finance sector, but it comes with risk. This session will explore how regulators can try and reduce the downside risk whilst allowing, and indeed enabling, the positive possibilities.
About Jonathan Hall
Jonathan Hall is an external member of the Bank of England's Financial Policy Committee (FPC). He is a member of the Founders Circle of the Institute for the Future of Work (IFOW). He has an MA in Physics and Philosophy from Oxford University and has a PhD in Philosophy of Mind from Edinburgh University. Jonathan has over 25 years of experience in the financial sector and has previously worked at Eisler Capital, Goldman Sachs, and Credit Suisse Financial Products. He sat on the Board and Executive Committee of International Swaps and Derivatives Association, the Board of Tradeweb, the Financial Stability Board Market Participants Group on Reforming Interest Rate Benchmarks, and the Bank of England Working Group on Risk-Free Reference Rates.