Artificial intelligence was the most frequently cited risk in the Federal Reserve’s November Financial Stability Report survey, mentioned by 87% of market contacts, up from 50% in spring.
The New York Fed collected responses from 23 contacts at banks, broker-dealers, investment funds and advisory firms during September and October. Participants assessed potential shocks over the next 12–18 months. The report explicitly distinguishes their views from those of the Federal Reserve.
Respondents highlighted elevated AI-related equity valuations, sophisticated cyberattacks and complex financing arrangements. They warned that disappointing earnings, circular financing and debt-funded investment could amplify losses and spread weakness to business investment and household spending.
The Fed also warned that advanced models can detect and exploit vulnerabilities, creating challenges for banks and shared service providers. Disruption at a critical vendor could affect multiple institutions. G7 authorities previously agreed to cyberattack drills to test financial-sector responses.
The broader report still describes the banking system as sound and resilient, with strong regulatory capital. It generally reflects information available through October 28. Its scenarios describe how shocks could interact with existing vulnerabilities, rather than predicting an imminent financial crisis.
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