A senior US Federal Reserve official on Wednesday warned that some of the attributes that make generative artificial intelligence attractive also pose risks to the financial system, including market manipulation.
The Fed's vice chairman for supervision, Michael Barr, said the popularity of generative AI could result in “herding behaviour” that could increase market volatility.
“Speed, automaticity and ubiquity could generate new risks at wide scale,” Mr Barr said at the Council on Foreign Relations in New York. “As GenAI agents will be directed to maximise profit, they may converge on strategies to maximise returns through co-ordinated market manipulation, potentially fuelling asset bubbles and crashes.”
He also suggested regulators should monitor GenAI's effects on economic and political institutions, as it could concentrate power “in the hands of the very few and could lead to the gains being realised only by a small group, while the rest are left behind”.
The advanced technology could also entice non-banks to “be more nimble and risk-forward”, potentially pushing them into less-regulated territory.
Mr Barr played down the near-term potential gains of GenAI as “overhyped” in warning that failure for the new technology to achieve those breakthroughs could lead to a market correction.
AI gains have fuelled a bull run on Wall Street, with money pouring in to the Magnificent 7, the group of big tech firms that investors are hoping will deliver significant advances in artificial intelligence.
Conversely, Mr Barr suggested that the longer-term view of AI is “under-appreciated”.
One of the biggest questions surrounding AI is its impact on the labour market. An analysis from the International Monetary Fund reports that 40 per cent of global employment is exposed to AI risk.
When pressed on AI's effects on global employment, Mr Barr said history shows the labour market adjusts to new technology. "But it is a very painful adjustment,” he said.
Barr defends stepping down
Mr Barr also defended his decision to step down from his role as vice chairman for supervision, the Fed's bank regulator role.
He announced his decision last month after President Donald Trump threatened to sack him. Mr Barr at the time maintained the President did not have the legal authority to fire him, but said he wanted to avoid the distraction a prolonged legal battle would bring.
“That distraction would have prevented us from doing our job … and to me, it wasn't worth it, so I decided to step down from the vice chair role,” Mr Barr said.
There are fears that Mr Trump would try to impose his will on the Federal Reserve, which has independence from the political trappings of Washington. Fed chairman Jerome Powell has maintained that Mr Trump will have no say on the central bank's monetary policy decisions and that he does not have the authority to fire him.
Mr Barr will retain his role as a governor on the Federal Reserve Board. His term expires in 2032.
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If you go
The flights
Emirates flies from Dubai to Seattle from Dh5,555 return, including taxes. Portland is a 260 km drive from Seattle and Emirates offers codeshare flights to Portland with its partner Alaska Airlines.
The car
Hertz (www.hertz.ae) offers compact car rental from about $300 per week, including taxes. Emirates Skywards members can earn points on their car hire through Hertz.
Parks and accommodation
For information on Crater Lake National Park, visit www.nps.gov/crla/index.htm . Because of the altitude, large parts of the park are closed in winter due to snow. While the park’s summer season is May 22-October 31, typically, the full loop of the Rim Drive is only possible from late July until the end of October. Entry costs $25 per car for a day. For accommodation, see www.travelcraterlake.com. For information on Umpqua Hot Springs, see www.fs.usda.gov and https://soakoregon.com/umpqua-hot-springs/. For Bend, see https://www.visitbend.com/.
Key facilities
- Olympic-size swimming pool with a split bulkhead for multi-use configurations, including water polo and 50m/25m training lanes
- Premier League-standard football pitch
- 400m Olympic running track
- NBA-spec basketball court with auditorium
- 600-seat auditorium
- Spaces for historical and cultural exploration
- An elevated football field that doubles as a helipad
- Specialist robotics and science laboratories
- AR and VR-enabled learning centres
- Disruption Lab and Research Centre for developing entrepreneurial skills
The specs
AT4 Ultimate, as tested
Engine: 6.2-litre V8
Power: 420hp
Torque: 623Nm
Transmission: 10-speed automatic
Price: From Dh330,800 (Elevation: Dh236,400; AT4: Dh286,800; Denali: Dh345,800)
On sale: Now
UAE%20SQUAD
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Test
Director: S Sashikanth
Cast: Nayanthara, Siddharth, Meera Jasmine, R Madhavan
Star rating: 2/5
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MATCH INFO
Alaves 1 (Perez 65' pen)
Real Madrid 2 (Ramos 52', Carvajal 69')
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EMIRATES'S%20REVISED%20A350%20DEPLOYMENT%20SCHEDULE
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UAE v IRELAND
All matches start at 10am, and will be played in Abu Dhabi
1st ODI, Friday, January 8
2nd ODI, Sunday, January 10
3rd ODI, Tuesday, January 12
4th ODI, Thursday, January 14
A MINECRAFT MOVIE
Director: Jared Hess
Starring: Jack Black, Jennifer Coolidge, Jason Momoa
Rating: 3/5
UAE currency: the story behind the money in your pockets
Five ways to get fit like Craig David (we tried for seven but ran out of time)
Start the week as you mean to go on. So get your training on strong on a Monday.
Train hard, but don’t take it all so seriously that it gets to the point where you’re not having fun and enjoying your friends and your family and going out for nice meals and doing that stuff.
Think about what you’re training or eating a certain way for — don’t, for example, get a six-pack to impress somebody else or lose weight to conform to society’s norms. It’s all nonsense.
Get your priorities right.
And last but not least, you should always, always chill on Sundays.
Formula Middle East Calendar (Formula Regional and Formula 4)
Round 1: January 17-19, Yas Marina Circuit – Abu Dhabi
Round 2: January 22-23, Yas Marina Circuit – Abu Dhabi
Round 3: February 7-9, Dubai Autodrome – Dubai
Round 4: February 14-16, Yas Marina Circuit – Abu Dhabi
Round 5: February 25-27, Jeddah Corniche Circuit – Saudi Arabia
Banned items
Dubai Police has also issued a list of banned items at the ground on Sunday. These include:
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Political flags or banners
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Bikes, skateboards or scooters
Election pledges on migration
CDU: "Now is the time to control the German borders and enforce strict border rejections"
SPD: "Border closures and blanket rejections at internal borders contradict the spirit of a common area of freedom"
The National Archives, Abu Dhabi
Founded over 50 years ago, the National Archives collects valuable historical material relating to the UAE, and is the oldest and richest archive relating to the Arabian Gulf.
Much of the material can be viewed on line at the Arabian Gulf Digital Archive - https://www.agda.ae/en
The rules on fostering in the UAE
A foster couple or family must:
- be Muslim, Emirati and be residing in the UAE
- not be younger than 25 years old
- not have been convicted of offences or crimes involving moral turpitude
- be free of infectious diseases or psychological and mental disorders
- have the ability to support its members and the foster child financially
- undertake to treat and raise the child in a proper manner and take care of his or her health and well-being
- A single, divorced or widowed Muslim Emirati female, residing in the UAE may apply to foster a child if she is at least 30 years old and able to support the child financially
The specs: 2018 Nissan Patrol Nismo
Price: base / as tested: Dh382,000
Engine: 5.6-litre V8
Gearbox: Seven-speed automatic
Power: 428hp @ 5,800rpm
Torque: 560Nm @ 3,600rpm
Fuel economy, combined: 12.7L / 100km
Results
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Analysis
Members of Syria's Alawite minority community face threat in their heartland after one of the deadliest days in country’s recent history. Read more
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Another way to earn air miles
In addition to the Emirates and Etihad programmes, there is the Air Miles Middle East card, which offers members the ability to choose any airline, has no black-out dates and no restrictions on seat availability. Air Miles is linked up to HSBC credit cards and can also be earned through retail partners such as Spinneys, Sharaf DG and The Toy Store.
An Emirates Dubai-London round-trip ticket costs 180,000 miles on the Air Miles website. But customers earn these ‘miles’ at a much faster rate than airline miles. Adidas offers two air miles per Dh1 spent. Air Miles has partnerships with websites as well, so booking.com and agoda.com offer three miles per Dh1 spent.
“If you use your HSBC credit card when shopping at our partners, you are able to earn Air Miles twice which will mean you can get that flight reward faster and for less spend,” says Paul Lacey, the managing director for Europe, Middle East and India for Aimia, which owns and operates Air Miles Middle East.
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The%20specs
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Dengue%20fever%20symptoms
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The specs: 2018 Mercedes-Benz E 300 Cabriolet
Price, base / as tested: Dh275,250 / Dh328,465
Engine: 2.0-litre four-cylinder
Power: 245hp @ 5,500rpm
Torque: 370Nm @ 1,300rpm
Transmission: Nine-speed automatic
Fuel consumption, combined: 7.0L / 100km