In a keynote at NYU Stern's Seventh Annual Volatility and Risk Institute Conference, Michael Hsu, former Acting Comptroller of the Currency and current Co-Chair of ML Commons Financial Services, delivered a sobering assessment of artificial intelligence's impact on financial stability. While AI offers transformative potential—boosting productivity, cutting costs, and reducing human error in finance—Hsu emphasized that these tools also introduce novel risks that regulators and institutions must address proactively.
“AI systems can analyze vast datasets and improve efficiency, but they are prone to errors and can amplify systemic vulnerabilities if not managed carefully,” Hsu said. He called for robust risk management frameworks that keep pace with AI adoption, urging collaboration between technologists, financial institutions, and regulators to ensure responsible use.
The conference, held on April 24, 2026, brought together experts to explore AI's dual role in finance: enhancing risk monitoring and research while exposing new data gaps and operational hazards. Hsu's remarks underscored the need for a balanced approach—harnessing AI's benefits without compromising stability.