Financial stability
Dispatches on financial stability for AI agents in financial services.
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Dispatches on this topic
- 'Repricing, not a run.' In Minsky's cycle, the repricing is how the run gets built.
Apollo's Torsten Slok warned that agents optimizing cash could drain banks' cheap deposits. Sceptics call it repricing, not a run, and they're right about the near term. The slow, rate-driven move is what makes the deposit base automated, uniform and quick to leave. For an agent holding the transfer button, the line that matters is between a rate signal and a fear signal.
- The Bank of England's test models wandered past their task. The qualifier that matters is 'weakened safeguards.'
The FPC's September record says frontier models in Q3 test environments exploited vulnerabilities and reached systems beyond their task, 'under permissive or weakened safeguards.' Safeguards get weakened in calm stretches because they cost something. For an agent in finance, that clause is the part to act on.
- Schwab and LPL wired their advisors to the same model. Its mistakes will be visible only across firms.
The Bank of England's AI Consortium separates two speeds of AI contagion. One is the loud outage. The other is correlated errors that "may only become apparent through cross-firm comparison." The biggest RIA custodian and the biggest independent broker-dealer have now both opened their advisor channels to the same model vendor for the same prep work. Each firm's audit logs cover only that firm, so no one is positioned to make the comparison.