Bank for International Settlements – BIS

🎙️ Revisit this Bisness Podcast episode: Shifts in the life insurance industry Did you know that the life insurance industry has undergone profound changes since the Great Financial Crisis, bringing new systemic risks and regulatory challenges? In this episode of the BISness podcast, Gaston Gelos and Frank Packer Frank explore how these transformations continue to shape global financial stability. Their insights remain as relevant today as ever, offering valuable lessons for policymakers, regulators, and industry leaders. 🎧 Listen again or catch up on your preferred platform: Spotify: https://bit.ly/3WWyW7H Apple Podcasts: https://apple.co/43A0rYr BIS website: https://bit.ly/3Ileu99

March was a full and rewarding month at the BIS Tower in Basel. We hosted a series of local visits at our headquarters and, alongside taking part in Basler Geschichtstage (“Basel History Days”), we had the pleasure of welcoming school classes – and their teachers – from across Switzerland and Germany. It was a valued opportunity to engage with the public and the local community.

Central banks are increasingly exploring and using generative artificial intelligence (AI) to support their activities, such as economic and monetary analysis, statistical production, financial supervision and payment oversight. Large language models (LLMs) have unlocked unprecedented opportunities to deal with the textual data that central banks both use and produce. Continuous and rapid innovations are further expanding the capabilities and quality of generative AI’s outputs. Examples include retrieval-augmented generation techniques (RAGs), small language models (SLMs) and agentic AI. In practice, however, the use of generative AI is not without challenges, especially related to data quality and IT infrastructure. One question for central banks is how to make the most of these promising yet often embryonic technological advances in an efficient, effective, ethical and safe way. In its latest IFC Bulletin, the BIS’s Irving Fisher Committee on Central Bank Statistics (IFC) has identified three distinct areas of focus: •The design and implementation of governance frameworks for managing the associated risks and harnessing AI effectively and responsibly. •Technical aspects, reflecting the need to secure adequate IT resources as well as to continue supporting interoperable data processes, standards and systems. •The importance of international cooperation and knowledge exchange across central banks and with other stakeholders involved in the data ecosystem. Read more here: https://bit.ly/4m0axde

Offshore activity obscures financial links in residence-based statistics that only become clear from a nationality perspective, like that available in the BIS statistics on banking and debt securities markets. Learn more: https://bit.ly/3NOsVJg #BISQuarterly

Synthetic risk transfers (SRTs) allow banks to share credit risk on their loan portfolios with institutional investors and receive capital relief. We document the recent growth of #SRTs and assess their risks from a system-wide perspective. Learn more: https://bit.ly/4sk1hmt #BISQuarterly

Artificial intelligence (AI) is reshaping the financial sector, with generative AI (gen AI) further amplifying the ever-growing importance of data. The tremendous opportunities associated with this transformation are accompanied by significant challenges. Financial supervisors have a key role to play in supporting financial institutions as they navigate this evolving landscape. This includes clarifying their expectations on critical areas such as data governance, data quality, security, privacy and third-party dependencies. Additionally, fostering dialogue with data protection authorities and industry stakeholders can help build a shared understanding of both current and emerging challenges. The latest paper by Juan-Carlos Crisanto, Adrien Currat, Johannes Ehrentraud and wenguang wu, "In data we trust? Emerging policy and supervisory approaches to AI data use in financial services", explores the critical role of data in AI systems and examines cross-sectoral data protection guidance as well as financial authorities’ emerging expectations to address data-related risks in AI. Read the full paper here: https://bit.ly/4szxypX

Emerging market economies adjust policy rates based on how external shocks affect their financial conditions. When FX markets are shallow and external debt is high, EMEs often move rates in the shock’s direction. Learn more: https://bit.ly/4btghHo #BISQuarterly

How is big tech paying for the AI build-out? Learn how on‑ and off‑balance sheet borrowing is funding big tech’s AI infrastructure, including data centres, and dive into the BIS Quarterly Review for a full analysis. Learn more: https://bit.ly/4bBc5FH #BISQuarterly

Alexandre Tombini, Chief Representative of the BIS Americas Office, participated in the policy panel “The future of money: What’s next for Mexico and the world” at the 89th Banking Convention in Cancún, Mexico, earlier this month. His remarks addressed the transformative role of digitalisation in money, payments and financial systems, with a focus on developments in the Americas. Mr Tombini highlighted the impact of fast payment systems in advancing financial inclusion and boosting economic productivity. He also discussed tokenisation’s potential to enhance financial transactions and foster more efficient markets. He emphasised: “Money will undoubtedly become more digital, programmable and interconnected. However, the goal should not be technology for its own sake, but rather a financial system that is inclusive, efficient and anchored in trust. This trust must be earned and sustained through sound policies and robust governance. Financial digitalisation is a strategic tool to ensure sound money, foster economic development and safeguard financial stability.” https://bit.ly/4bMjRg6