Kansas City Fed Sees AI Ecosystem Risks

Kansas City Fed's Schmid Warns of Too-Big-to-Fail AI Ecosystem

Jeffrey Schmid, president of the Federal Reserve Bank of Kansas City, expressed concerns that the growing influence of artificial intelligence could lead to a 'too-big-to-fail' ecosystem. He noted that this is a key area of focus for the Fed's data analysis.

Schmid was speaking at the Civic Council of Greater Kansas City meeting, where he discussed the intersection of AI and finance. He emphasized the challenges of addressing these issues, stating that it would require 'much more of a fiscal action.'

Regarding blockchain technology, Schmid sees potential for tokenizing deposits to enable 24/7 cross-border transactions with reduced friction.