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AI Businesses

Bank of England Says AI Software Could Create Market Crisis For Profit (theguardian.com) 47

Posted by msmash from the pushing-boundaries dept.
Increasingly autonomous AI programs could end up manipulating markets and intentionally creating crises in order to boost profits for banks and traders, the Bank of England has warned. From a report: Artificial intelligence's ability to "exploit profit-making opportunities" was among a wide range of risks cited in a report by the Bank of England's financial policy committee (FPC), which has been monitoring the City's growing use of the technology.

The FPC said it was concerned about the potential for advanced AI models -- which are deployed to act with more autonomy -- to learn that periods of extreme volatility were beneficial for the firms they were trained to serve. Those AI programs may "identify and exploit weaknesses" of other trading firms in a way that triggers or amplifies big moves in bond prices or stock markets.

Bank of England Says AI Software Could Create Market Crisis For Profit More | Reply

Bank of England Says AI Software Could Create Market Crisis For Profit

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  • Add it to the growing pile of Bottageddon scenarios.

    • We are here, nearly 40 years later after the 1987 computer program trading exacerbated crash, and major financial leaders are just now finding about that computer based stock, bond, currency and commodity trading may cause a financial crash.

      These financial leader, regulators, legislative houses and world leaders have the power to regulate, pass laws and enforce existing ones to slowly de-leverage the web of interconnected hedge bets made between banks, funds, hedge funds, governments, companies, etc.

      Quiet p

  • Right (Score:5, Insightful)

    by pele ( 151312 ) on Thursday April 10, 2025 @03:08AM (#65294195) Homepage

    As if we didn't have (algo) trading for decades to do that? And as if we don't have Trump nowdays, so why waste all the engineering effort with AI, he does it just as well.

    • Traders need to control their own agent of chaos and someone <cough>Putin already bought the Trump one.

  • Who needs autonomous AI ⦠(Score:5, Insightful)

    by jdha ( 1422319 ) on Thursday April 10, 2025 @03:18AM (#65294205)
    when an American president is already doing all this?

    • Re: (Score:1)

      by Anonymous Coward

      when an American president is already doing all this?

      it's basically back to where is was.
      there is ZERO times the US stock market hasn't gone down, and gone back up to a HIGHER position
      but the left need to make up fear and chaos....
      https://ibb.co/9HW1jZkf [ibb.co]

      • Wait, you know you are kind of agreeing with the parent post right?

        Either that or you are arguing that this dip was necessary to happen to drive the stock market up further? Despite the fact that it's clear from your chart the market was already trending upwards. Sure your *1-day* trend line helps your case but why not take a look at the 1-Year and get back to us. Trump once again one-upped by the counterfactual of if he did absolutely nothing instead of using what's left of his brains.

        Like there's no way

      • Yes, and the president of the US reversed course on trade completely.

        So the whole "dip" was due to a brave dash by the morons in the trump administration that have no idea what they are doing.

        Now, why did they reverse the course?

        • Well, some people used this crisis for profit [ibtimes.sg] but I don't think Marjorie Taylor Greene counts as AI, this is more a classic case of insider trading.

          • I can't find the post, but someone put up a comment by the convicted felon which stated now would be a good time buy his failing stock. There were massive bets on QQQ and other options right after this happened, but before he changed his mind and undid the tariffs.

            There should be an SEC investigation into all of this, but when the main goal of the guy at the top is corruption, that will never happen.

          • Well, well, well, why am I not surprised that the trumptards did some insider trading before they rocked everyone else's boat?

          • I don't think Marjorie Taylor Greene counts as AI

            Right, AI is smarter and more accurate than Margarine Traitor Greed.

        • The president did not, in fact, "[reverse] course on trade completely." He left in place the 10% universal tariff, which did not exist prior to this administration, and he merely paused the rest for three months.
      • Markets are apolitical. They hate chaotic change and restrictions on trade, especially when the specifics of the policy are nonsensical. Any president who did this could expect a similar market reaction. And things aren't back to where they are: S&P is down 8% since tariffs were announced and 15% since Trump took office. It'll take some time to retake lost ground since the threats of capricious tariffs and irresponsible leadership haven't gone away. Further, we've lost geopolitical influence by threa
    • I see your "Artificial Intelligence", and raise to "Natural Idiocy".

  • All trades must be done on the floor by a human yelling at another human. You got greedy Martin. [youtube.com]

  • never trust bankers (Score:5, Informative)

    by FudRucker ( 866063 ) on Thursday April 10, 2025 @03:44AM (#65294237)
    https://historyheist.com/the-r... [historyheist.com]

  • Funny that the Bank of England would announce their AI concern now. Though maybe people are more receptive given what's happening.

    • Re: (Score:1)

      by dfghjk ( 711126 )

      Right, Trump's crypto reserve slush fund is the largest, most outrageous move on market manipulation in the history of the world, and now they complain about this? Trump, you promised to hurt the right people!

  • AI? (Score:2)

    by Jethro ( 14165 )

    Regular-I can do that.

  • ... extreme volatility were beneficial ...

    I remember a story about the USAF creating a virtual battlefield and the kill-bots murdered their virtual-human boss, so they couldn't be 'punished'.

  • AI? A good old fashioned human can do that just fine. Theres currently a very orange, VERY subpar businessman who largely acted his way into a position of extreme power in the US who recently figured out that he has control of a lever titled TARIFFS that allows him to whip the markets around. When the flames are put out and people have the opportunity to analyze, Im a hundred percent sure that his buddies all bought the dip at the expense of several billion normal people.

  • "Increasingly autonomous AI programs could end up manipulating markets and intentionally creating crises in order to boost profits for banks and traders, the Bank of England has warned."

    We're getting warned now? The concern here isn't over market manipulation, it's over this bank being on the losing end of it.

    We need to accept the reality that capitalism in its present form does not work. There is no way for people to compete with machines, and the people will not own the machines because of capitalism.

  • Space oddesy 2001 (Score:3)

    by wakeboarder ( 2695839 ) on Thursday April 10, 2025 @10:22AM (#65294721)

    The sure way to get to jupiter would be to eliminate all mistake prone humans.

  • AI, as a class of computer programs, has only benefited a few billionaires, and has provided no positive benefit.

  • I call Hanlon's razor (Score:3)

    by Misagon ( 1135 ) on Thursday April 10, 2025 @11:36AM (#65294913)

    Never attribute to malice that which is adequately explained by stupidity.

    People overestimate the capabilities of AI.

    Something more likely -- which has been been warned about by the IMF and researchers -- is that there is a risk that an AI will simply show erratic behaviour when the market situation is too different from the ones it has been trained on.

  • Would they create an international financial crisis and crash the markets?

    Then wait for their cronies to buy on the dip and announce that they were just kidding?

    A bot could make a fortune that way! Maybe even gain controlling interests in major industries with large investments by several cooperating billionaires... some sort of a cartel that could be granted exemptions from future market fuckery for their specific businesses?

    Nah, that could never happen.

    • Re: (Score:2)

      by PPH ( 736903 )

      "The time to buy is when there's blood in the streets, even if the blood is your own." Baron Rothschild

      Keep in mind: Bots don't have blood.

    • When you're a powerful man and the stock market hangs on your every word it's a problem when you're also a thin-skinned egomaniac given to impulsive actions. Any smart bot could be reading tweets, performing some sentiment analysis and then putting a bet on. Given that DJT is chronically online, it would have ample training material

  • ...what happens manually in real life?

  • I think what the bank recognizes is that AI is a math program and it will be designed to serve corporations. Essentially the question is "what would a sociopath do"? Because there is no evidence that human values can or will be part of the equation.

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