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Janet Yellen

U.S. Treasury secretary, 2021–2025

2 records

Portrait source: US Department of the Treasury, Public domain

Records

Specific vulnerabilities may arise from the complexity and opacity of AI models; inadequate risk management frameworks to account for AI risks; and interconnections that emerge as many market participants rely on the same data and models. Concentration among vendors developing models, providing data, and providing cloud services may also introduce risks, which could amplify existing third-party service provider risks.

Exact quote, beginning

Janet Yellen

U.S. Treasury secretary, 2021–2025

In prepared 2024 remarks, Treasury Secretary Janet Yellen said AI use in finance may create vulnerabilities through opaque models, weak risk management, shared models, vendor concentration, and faulty data.

U.S. secretary of the TreasuryJune 6, 2024Financial Stability Oversight Council Conference on Artificial Intelligence and Financial Stability

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The Council’s new Analytic Framework, published last November, provides helpful insights into the range of potential risks that AI can pose to the financial system. Specific vulnerabilities may arise from the complexity and opacity of AI models; inadequate risk management frameworks to account for AI risks; and interconnections that emerge as many market participants rely on the same data and models. Concentration among vendors developing models, providing data, and providing cloud services may also introduce risks, which could amplify existing third-party service provider risks. And insufficient or faulty data could also perpetuate or introduce new biases in financial decision making. II. Treasury Actions The Biden Administration has been focused on harnessing AI’s potential to fuel innovation while mitigating risks, as reflected in President Biden’s landmark Executive Order on AI last year.

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Scenario analysis, often used by firms and governments to understand opportunities and risks in the context of uncertainty, could also be beneficial. Given how quickly AI technology is developing, with fast-evolving potential use cases for financial firms and market participants, scenario analysis could help regulators and firms identify potential future vulnerabilities and inform what we can do to enhance resilience.

Janet Yellen

U.S. Treasury secretary, 2021–2025

In prepared 2024 remarks, Treasury Secretary Janet Yellen said scenario analysis could help regulators and financial firms identify future vulnerabilities and improve resilience.

U.S. secretary of the TreasuryJune 6, 2024Financial Stability Oversight Council Conference on Artificial Intelligence and Financial Stability

SourceArchived
Context and checks

Surrounding words

The Council will also continue to support efforts to build supervisory capacity to better understand associated risks. Scenario analysis, often used by firms and governments to understand opportunities and risks in the context of uncertainty, could also be beneficial. Given how quickly AI technology is developing, with fast-evolving potential use cases for financial firms and market participants, scenario analysis could help regulators and firms identify potential future vulnerabilities and inform what we can do to enhance resilience. Let me end here for now. The tremendous opportunities and significant risks associated with the use of AI by financial companies have moved this issue toward the top of Treasury’s and the Financial Stability Oversight Council’s agendas.

What this quote does not say

  • The Treasury page labels the text ‘As Prepared for Delivery’; it is not a transcript of the delivered remarks.

How this was checked

  • Quote matched character-for-character against the captured page.

Reviewed by

an AI reviewer that read the whole source · an automatic character-by-character check