Financial Regulation and AI: A Faustian Bargain?

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Financial Regulation and AI: A Faustian Bargain?

alphaarchitect

4 months ago

77 views

Financial regulation has always faced a trade-off between simplicity and precision. Simple rules are transparent and robust, but often miss where risks actually build up. More sophisticated tools can be more precise, but they are harder to understand, harder to explain, and sometimes change behavior in unexpected ways.

Financial Regulation and AI: A Faustian Bargain?

Clayton and Coppola

Working paper, 2025

A version of this paper can be found here

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