Private credit to play bigger role in AI boom – BIS study
Hidden leverage may dispel notion that sector poses only moderate stability risks, authors say
Researchers at the Bank for International Settlements believe the boom in artificial intelligence may pose more financial stability and macroeconomic risks than previously thought, with hidden leverage being the main culprit.
In a bulletin published on January 7, Iñaki Aldasoro, Sebastian Doerr and Daniel Rees detail why they expect private credit to play an increasing role in financing AI in the US.
AI firms are increasingly seeking external funding, the authors say. However, risks concerning
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