ECB PUSHES FINANCIAL SYSTEM REVIEW AMID AI RISKS

Escrivá highlighted the need for financial institutions to stress-test their systems against emerging AI-related vulnerabilities. The review comes as artificial intelligence becomes increasingly embedded in banking operations, from trading algorithms to fraud detection. The ECB official underscored central banks' responsibility to maintain financial stability as new technologies reshape market dynamics. On stablecoins specifically, Escrivá emphasized that central banks must remain the ultimate guarantors against risks these digital assets pose to the financial system. The comments reflect broader regulatory concern about rapid AI adoption in finance without adequate safeguards. Central banks globally are developing frameworks to monitor how machine learning and automation could amplify systemic risks. The ECB's infrastructure review signals the bloc's intention to stay ahead of technological disruption while protecting monetary stability.