Banking watchdog warns on AI as global leaders gather in Davos

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Global leaders need a co-ordinated response to the challenges posed by AI, the chair of the world’s banking watchdog said, as he warned that the fast-developing technology “could change the course of history, not necessarily for the good”.

Pablo Hernández de Cos, who chairs the Basel Committee on Banking Supervision and is also governor of the Bank of Spain, urged leaders ahead of this week’s summit in Davos to use financial regulation as a blueprint for tackling issues such as AI and climate change.

The “really remarkable” co-operation on financial regulation that allowed watchdogs to keep the world’s financial system stable through a pandemic and two wars should be applied to AI, the Spanish official told the Financial Times.

De Cos said that there had been a clear increase in economic problems in the past decade and that international institutions needed to co-operate on finding solutions.

“However, what we are observing at the geopolitical level shows that reaching common agreements is becoming more and more difficult,” he said in an interview at his Madrid office, five months before the end of his non-renewable six-year term. “That is a concern for me and is a concern for many people.”

De Cos said the Basel Committee would publish a report on the financial stability implications of AI in the coming months.

“Financial stability is only one dimension, there are many other potentially more important consequences related to AI. Issues that if not properly managed could change the course of history not necessarily for the good,” he said.

“If we are not able to give a co-ordinated global response, the likelihood of getting the right solution to these challenges will be reduced.”

The call comes ahead of the World Economic Forum’s annual meeting in Davos, Switzerland, at which the potentially far-reaching impact of AI on industries, jobs and security will feature prominently.

Sam Altman, the recently reinstated head of OpenAI, Satya Nadella of Microsoft, and Arvind Krishna of IBM are all expected to speak at the annual gathering of business and political elites.

Delegates are expected to discuss the governance of AI, including a longstanding debate on whether the technology should be open-sourced and made available to the general public, or kept secure in the hands of a few companies such as Google, OpenAI and Microsoft.

Corporate AI leaders will also rub shoulders with regulators from the EU, the US and China, which spent 2023 proposing a range of policy solutions via the EU AI Act, the White House Executive Order and the UK’s Bletchley Park agreement.

“There needs to be a more co-ordinated approach, and there is no clear pathway in terms of how this tech will be regulated globally because of geopolitical implications involved,” said Cathy Li, who leads AI programming at the World Economic Forum.

Gary Marcus, an AI expert and professor at New York University who is attending this year, says a crucial question for attendees will be what can be done to prevent and limit AI-mediated misinformation in democracies this year. “There are 70 elections around the world in 2024, deepfakes are getting better, and [AI] models can be used to create misinformation,” he said. “This is a vital issue.”

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