AI and the Financial Markets: Accountability and Risk Management with Legal Tools

In the financial markets, advanced artificial intelligence (AI) is used, for example, in algorithmic trading in financial instruments, and in credit assessment to see whether someone is eligible for a loan. AI has many advantages, such as superior efficiency and lower costs. But letting advanced algorithms manage financial decisions also entails risks.

Today, there is immense uncertainty about who is legally accountable for decisions taken by an AI and their implications for human beings and companies. Existing rules are extremely diverse in nature, and have varying purposes. What is more, legislation that keeps up with technological development is essentially unattainable. Players involved in the financial markets therefore need to act on their own. Their aim is to proactively manage their own accountability and the risks associated with AI.

In the project, the researchers will study, above all, how the players seek to distribute risks and accountabilities through their own assorted agreements and contracts – with AI programmers, customers, insurance companies and so forth. In addition, the researchers will study the overall ‘infrastructure of accountability’ laid down in the legislation, one reason being to see which gaps most urgently need to be closed.