Fed’s Bowman flags rising AI risks to banks, calls for coordinated oversight
Federal Reserve Vice Chair for Supervision Michelle Bowman urged regulators to work more closely together as artificial intelligence tools rapidly make their way into the banking system, warning that the same technology helping firms defend themselves could also be turned against them. Speaking at a Financial Stability Oversight Council roundtable on cybersecurity and artificial intelligence, Bowman said regulators are still figuring out “how best to oversee” these fast-moving technologies as banks begin integrating them into core operations. One example she pointed to was Mythos, an advanced system built by Anthropic that can scan software for vulnerabilities. “Anthropics Mythos… shows the dynamic nature of this technology and how quickly its capabilities can develop.” The concern, Bowman indicated, is straightforward but serious: tools that help banks find weaknesses in their systems could just as easily be used by attackers to exploit them. Safer ways for banks to adopt AI Behind the scenes, regulators are now wrestling with a practical question — whether existing rules are enough. For years, banks have operated under model risk frameworks designed to keep quantitative systems in check. But AI, especially newer generative models, doesnt always behave in predictable ways. That makes it harder to test, monitor, and explain — all things regulators typically expect. Officials