AI Governance and Risk Management in Central Banks

This episode covers a report from the Bank for International Settlements (BIS) which provides guidance on the governance and risk management of artificial intelligence (AI) adoption within central banks. It examines the benefits and use cases of AI across various central bank functions, alongside a comprehensive taxonomy of associated risks, including operational, security, ethical, and reputational concerns. The report proposes a risk management strategy leveraging existing frameworks, such as the three lines of defence model, and outlines ten practical actions for effective AI governance. A key focus is balancing AI innovation with robust risk mitigation, particularly concerning generative AI. Finally, it reviews current industry standards and frameworks for responsible AI implementation.