The Dual Impact of Artificial Intelligence on Global Monetary Stability
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Artificial intelligence (AI) is becoming more and more significant to the financial system of the world and is taking a major role in determining the stability of the international money system. With the increasing complexity and interconnectedness of financial markets, central banks, financial institutions, and investors are turning to AI tools to enhance their decision-making and risk management. The present paper discusses the issue of whether AI helps stabilize the monetary conditions or it creates new weak points. Compared to conventional analytical approaches, AI systems have the ability to process vast amounts of data in real time to make quicker and frequently more precise predictions. These abilities can assist in more effective monetary policies, earlier risk identification, and general market effectiveness. Nonetheless, there are other significant issues that AI brings, such as reduced transparency, the possibility of algorithmic bias, and the threat of systemic disturbances through automated decision-making. This paper analyses the effect of AI on the global monetary system in terms of financial stability, risk management and policy effectiveness. The results indicate that despite the high benefits of AI, it also poses new threats that need to be tackled properly. Thus, AI must be considered as an instrument that can enable and provoke stability. In general, AI is one of the significant changes in the development of the global financial system, and its prospective effects will rely on the regulation and the responsible use.
Keywords
Artificial Intelligence, Central Banks, Digital Finance, Financial Stability, International Monetary System, Risk Management