Banks fear Fed crackdown on AI models

Dealers say agencies’ request for info could prompt new rules that stifle model innovation

Regulation

US regulators are pushing banks to disclose more information about their use of machine learning (ML) – a move that some fear could stymie the development of promising approaches to modelling everything from credit decisioning to regulatory stress scenarios, where techniques used to power models can defy easy explainability.

Led by the Federal Reserve, US prudential regulators issued a request for information (RFI) in April on the uses of artificial intelligence (AI) and ML. The deadline for

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