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Informist, Thursday, Sept. 10, 2026

 

MUMBAI – The growth of artificial intelligence will have varrying impact on countries and respective central banks will have to intervene with tailor-made policies to protect the economies, Bank of International Settlements General Manager Pablo Hernandez de Cos said Thursday. AI will have a varrying impact on macro economic conditions and financial sectors, and central banks will have to intervene for both, he said at the Global Fintech Fest 2026. 

 

According to him, the ramification of AI is far beyond what meets the eye, prima facie. In the long run, it can move incomes away from labour, which will have an economic ramification in domestic markets. Lack of income will have an impact on demand, and lower demand can impact both growth and inflation, he said. Managing growth and inflation is the basic role of the central banks, so they will have to intervene, he said. 

 

Interestingly, Cos said, the total investments towards AI by a country will also lead to the monetary policy intervention. Eventually, countries may add to their debt to invest in AI, and that will impact the domestic financial situation, which will call for monetary policy actions, Cos said. Countries may also increase their investments in AI, thereby constraining space for growth-supporting investments, and that will eventually slow down economic growth. The central banks will then also have to then opt for expansionary policy to support growth, he said.

 

He also said AI will also have varrying impacts on financial sector security. It will be increasingly monopolised by bigger players in the ecosystem which can always lead to cyber security threats for other countries who fall behind the curve, Cos said.

 

According to Cos, with AI scaling disproportionately across regions, countries will have to be cautious of the outcomes. Cyber security is a key threat, but there could be bigger stress points, he said. Cos also said global collaboration will be warranted to tackle AI-related risks.  End

 

Reported by Priyasmita Dutta and Sagar Sen

Edited by Akul Nishant Akhoury

 

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