The RBI is examining proposed models for ‘predictive’ analysis of the markets, particularly the use of AI and machine learning
The central bank will leverage AI and ML models to detect early signs of asset bubbles, and market disruptions by analysing patterns from historical data, macroeconomic data and market behaviour
Besides, AI and ML tools are likely to help the regulator in ‘stress testing’ of banks, ensuring that banks have enough capital to absorb shocks from downturn in economy and decline in markets
The Reserve Bank of India is examining proposed models for ‘predictive’ analysis of the markets, particularly the use of artificial intelligence and machine learning.
According to a report by the Economic Times, the central bank will leverage AI and ML models to detect early signs of asset bubbles, and market disruptions by analysing patterns from historical data, macroeconomic data and market behaviour.
Besides, AI and ML tools are likely to help the regulator in ‘stress testing’ of banks, ensuring that banks have enough capital to absorb shocks from downturn in economy and decline in markets.
Citing sources, the report further said that the RBI is rejigging its standing committee of analytics and amended the terms of reference of the panel to support its supervisory functions.
The amended terms of reference of the panel now include:
- Assess the advanced statistical models being used in the department;
- Assess the proposed models for ‘predictive analysis’, particularly use of AI and ML;
- Assess capabilities of the existing staff engaged in analytics and recommend training;
- Suggest optimal IT resources and system features for use of advanced analytical methods;
- Assess global developments in the use of analytics for financial supervision so that new tools can be adopted.
(The story will be updated shortly.)