World's Central Banks Are Wary of AI and Struggling To Quit the Dollar, Survey Shows (reuters.com) 30
An anonymous reader shares a report: AI is not a core part of operations at most of the world's central banks and digital assets are off the table, according to a survey released on Wednesday by the Official Monetary and Financial Institutions Forum. The working group of 10 central banks from Europe, Africa, Latin America and Asia managing roughly $6.5 trillion in assets also found that the institutions that have delved deepest so far into AI are the most cautious about the risks.
The primary concern is that AI-driven behaviour could "accelerate future crises," the survey showed. "AI helps us see more, but decisions must remain with people," one participant was quoted as saying in the group's report. More than 60% of respondents said that AI tools - which have sparked layoffs already at technology companies and retail and investment banks - are not yet supporting core operations.
The primary concern is that AI-driven behaviour could "accelerate future crises," the survey showed. "AI helps us see more, but decisions must remain with people," one participant was quoted as saying in the group's report. More than 60% of respondents said that AI tools - which have sparked layoffs already at technology companies and retail and investment banks - are not yet supporting core operations.
Risky Behavior. (Score:4, Insightful)
The primary concern is that AI-driven behavior could "accelerate future crises," the survey showed.
Wall Street very much comes to mind.
Summary (Score:5, Insightful)
* Large-scale automated fraud and speculation by cryptobros is a problem
* Large-scale automated stupidity and craziness by ai-bros (who are often ex-cryptobros) is a problem.
I am seeing some commonality here: the problem is technobro fraud and reckless stupidity.
Re:Summary (Score:5, Interesting)
I've been thinking of the of crypto/AI/techbro behavior as a symptom and just the next generation of the shift in business culture that came about in the 1980's where we went into low tax, low regulation and cutting of services. Meanwhile the fast money culture turned the stock market from this somewhat mundane piece of the business world to a dramatic entity where you could turn thousands into millions with just a little gumption and smarts.
So while we expanded our economy exponentially we decided to not use that wealth to grow and maintain proper society. Oh you want a pension? That's stupid just put it in the stock market silly! Surely I the business owner am not saving gobs of money by this arrangement now!
Give that a few generations, sprinkle on the internet and here we are in a world where our business sector is obsessed with scams, bubbles and gambling because even the way they made money in the 80's isn't fast enough, Gordon Gecko was really pretty stodgy and I will put $40k on Polymarkt on that opinion.
Re: Summary (Score:2)
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I would agree but also like the man said, "taxes, taxes, taxes." [youtube.com]
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Sorry, it would get in the way of their current oath to ENHANCE SHAREHOLDER VALUE!!!
Doing LESS harm, would require a proposal that identifies immediate increase in quarterly returns, while not acknowledging any past malfeasance that would open them to lawsuits
Doing NO HARM, would prove to be even more difficult
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"a do no harm oath, just like most other industries"
Like which other industries?
First, an MBA is not an industry. Most likely they are not even industrialists. They are cogs in the machinery,
Second, again, what other industries have a 'do no harm oath'? Doctors claim to subscribe to this, Realtors purport to adhere to an ethical standard that could be confused with the do no harm mantra, Professional engineers have professional responsibilities to do work 'correctly', for lack of a better single word.
Do you
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I've been thinking of the of crypto/AI/techbro behavior as a symptom and just the next generation of the shift in business culture that came about in the 1980's
No, that's not it at all. It's just classic hubris on the part of some people, typically (bad) engineers, or just anybody who has deep knowledge in one particular domain and have themselves convinced that they're experts at every domain.
We see it here on slashdot all the time; think how many people here talk about how "easy" it is to be a CEO even though they literally don't know the first thing about it and do not have even a single second of experience at it. Yet somehow they're convinced they're one of t
Re:Summary (Score:4, Insightful)
Who says it's "easy" to be a CEO, I certainly wouldn't say that but I think I speak for most folks opinions is that it's a difficult job but nowhere near as difficult as the pay they receive. Is it more difficult than a surgeon, or an analog radio engineer or the project manager of a multimillion dollar project or a dozen other high skill jobs in the world?
It's not that it's easy it's that it receives a pretty much totally manufactured level of compensation and prestige when it's just a job. An important job, one where if you get it you should be wealthy for sure, but not in the hundreds of millions or billions. I don't think there is any human work that could be worth that much, we all only have 24 hours in a day.
Yes they'll tell you the huge money involved with their decisions, "think of the risk!" but yet when they fail as we have seen hundreds of times they still walk away with golden parachutes, stocks and money even when their tenure is littered with failure, there's no consequences for those folks so there's really no risk. Meanwhile by their decree thousands of people can just be laid off so they can make numbers.
and you're allowed to fail,
Ehh, there's being allowed to fail for the 90% of us and there's being allowed to fail for the remaining 10% where you are actually allowed to fail, you'll get a second chance, your lifestyle won't really be affected, you mostly were able to leverage other peoples money, you still hav eyour own money and social connections, etc. The risk is entirely different.
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Who says it's "easy" to be a CEO,
You must be new here.
but nowhere near as difficult as the pay they receive
Difficulty doesn't come into play. What does is how unique and/or replaceable your particular talent and/or skill is. Everybody can learn to build an airplane that flies after going to school for a few years. There's nothing special about that. But some people are going to create better designs with the same amount of effort.
It's not that it's easy it's that it receives a pretty much totally manufactured level of compensation and prestige when it's just a job. An important job, one where if you get it you should be wealthy for sure, but not in the hundreds of millions or billions. I don't think there is any human work that could be worth that much, we all only have 24 hours in a day.
How did you reach this conclusion? Do tell. What math did you use? Don't forget to justify your own pay while you're at it.
Though it honestly sounds like you're usi
Unmatched Liquidity (Score:3)
the unmatched liquidity of U.S. Treasuries kept the U.S. currency anchored.
That will be tested soon. As the price that the US has to pay to find buyers for their new issuances rises, they should find buyers in the short term. But eventually the market simply won't want the new bonds at any price. But risk will outweigh reward soon enough, and those bonds people hold will be illiquid. Or, liquid at fire sale prices, well below face value.
But the reality of a global reserve currency is less than 200 years old, and there really have only been two. The dollar and the pound sterling. So currency exchange is not new. And given technology today, managing it would be (tentatively) easier than ever. Even today some trade happens out of the dollar ecosystem.
I think we'll figure it out. If something doesn't bubble to the top in short order, we'll get by. Trade won't stop for something as trivial as that.
Re: Unmatched Liquidity (Score:1)
Are you aware how US Treasury repo trades at a price independent of the face value?
Has Japan proved the central bank can supply liquidity for government bonds way beyond any limits imagined by mainstream economics?
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Zimbabwe
Re: Unmatched Liquidity (Score:1)
Does it make economists experience cognitive dissonance to acknowledge that Zimbavwe's hyperinflation (and subsequent hyperrdeflation after dollarization) was a result of a scarcity of US dollars, something that Japan's unlimited currency swap line with the Fed prevents?
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Yes, ... sort of. I'll bet my understanding iis flawed.
Japan is the crazy outlier. But almost none of the Japanese debt is held by foreign entities. Almost all of it is held by the Bank of Japan, other Japanese banks, and Japanese citizens. As such, they remain functional because nobody is weaponizing their state of indebtedness. Everybody knows that fleeing the market en masse will destroy the value for everybody.
It's precisely because the US currency and debt are the global standards that it's open to the
Re: Unmatched Liquidity (Score:1)
Did BRICS panic first and where is it today?
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I don't understand your question. Only India and Brazil's hold mentionable amounts of US debt, and neither are in the global top 10. Can you clarify your point?
Re: Unmatched Liquidity (Score:1)
Did you forget about China?
And even if China has decreased to third place among foreign holders of US debt, has their sell-off helped adoption of the BRICS alternate trade currency in any way, or challenged King Dollar at all?
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I still don't understand. Are you agreeing with me regarding the fragility of the US dollar's status? Because I did not bring up BRICS, nor did I put forward any candidate currencies. I even went so far as to point out you don't even need one to step up right away.
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No weaponization necessary. For domestic debt, as long as your citizens keep buying bonds you're fine, and Japan's citizens keep buying bonds. If they stopped then you'd have to cut back government services. It's kind of a tax, maybe.
Foreign debt requires foreigners to keep buying your bonds. If they stop then you have to cut back not their government services, but those of your own citizens. It's not entirely unlike t
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Exactly. That's why comparing the positions of Japan and the US isn't valid. They are very different situations. Japan is pretty well insulated. The US is far more vulnerable.
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Right now the drive to diversify is entirely political.
Ok great you hate Trump, congrats.
The FACT is that there is no serious alternative to the USD as a reserve currency.
The currencies mentioned (euro, yuan) are indeed probably the closest in a basically empty field.
The yuan is controlled by a deeply dishonest tyrannical government that hasn't authentically reported financial information for decades. The EU is an anti democratic talking shop that can't manage to stand up a coast guard, much less manage a m
Struggling to quit the dollar (Score:2)
Ask Saddam Hussein how that went.
Re:Struggling to quit the dollar (Score:5, Insightful)
Some of the countries working to quit the Dollar also have nuclear weapons. It's not something the US can solve with a bit of gunboat diplomacy.
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Using nukes (or even a large dose of conventional warfare) is beyond a point of no return. Where most other nations will refuse to deal with you. Some may, but then you end up with a division into two groups. Like the Axis and Allied powers during WWII. And we all know how that ended up.
It's not a situation one can step back from easily and return to the negotiating table.
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BRICS I Was Told (Score:2)
I was told that BRICS was the future. All I can say is that if that's the case, the future is very bleak indeed.
Grouping a bunch of dog shit economies does not make a great global economy. It makes the greatest dog shit economy "in the whuurld."