Central banks face ‘black box’ effect in AI, warns BIS
Institution’s latest bulletin underlines the opportunities and challenges of machine learning
Central banks using machine learning face the problem of hidden biases in models and the tendency for artificial intelligence (AI) to “hallucinate”, says the Bank for International Settlements (BIS).
In a bulletin published on January 23, BIS researchers outlined both the promise and potential pitfalls of AI. The non-linear interaction between many variables can make it hard to understand how a particular machine learning model arrived at a conclusion. This is known as the “black box” effect
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