Live stream | Building a Risk-based Framework for AI in Finance: Where is the Human in the Loop?

UCL Centre for Ethics and Law Live Stream Webinar
Building a Risk-based Framework for AI in Finance: Where is the Human in the Loop?

About this event

We need a framework for understanding and addressing the increasing role of artificial intelligence (‘AI’) both generally and specifically in finance. This presentation frames the major elements of a risk-based approach, across a range of contexts, categorised as macro, sectoral, infrastructure, criminality, and culture. From the sectoral context, this framework should focus on human responsibility as central to addressing the AI ‘black box’ problem — that is, the risk of an AI producing undesirable results that are unrecognised or unanticipated due to people’s difficulties in understanding the internal workings of an AI or as a result of the AI’s independent operation outside human supervision or involvement. Professor Arner argues, building on recent work including FinTech: Finance, Regulation and Technology (Cambridge University Press 2024) (with Ross Buckley and Dirk Zetzsche), that a proportional differentiated approach across these very different forms of risk is most appropriate, in order to maximise opportunities as well as risks. In the context of sectoral risks, the most effective regulatory approaches to addressing the role of AI should build on the experiences of finance to bring humans into the loop through personal responsibility regimes, thus eliminating the black box argument as a defence to responsibility and legal liability for AI operations and decisions.

Speaker: Prof Douglas Arner, Kerry Holdings Professor in Law, University of Hong Kong

Discussant: Dr Maria Lucia Passador, Bocconi University

Chair: Prof Iris H-Y Chiu, UCL Laws

Watch the video directly on our Youtube channel or view it here

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About the Speaker

Professor Douglas Arner

Professor Arner is Kerry Holdings Professor in Law, University of Hong Kong. He also holds the Sir Roy Goode Chair at the Centre for Commercial Law Studies, Queen Mary University of London. In addition, he is Associate Director of the Standard Chartered Foundation-HKU FinTech Academy, a Research Affiliate of the Cambridge Centre for Alternative Finance at Judge Business School of Cambridge University, a Senior Visiting Fellow of Melbourne Law School of the University of Melbourne, a non-executive director of NASDAQ and Euronext listed Aptorum Group, and an Advisory Board Member of the Centre for Finance, Technology and Entrepreneurship (CFTE). He co-founder and former Director of the HKU’s Asian Institute of International Financial Law. Douglas has served as a consultant with over forty countries and a wide range of international organisations including, among others, the World Bank, Asian Development Bank, UN, APEC, Alliance for Financial Inclusion, and European Bank for Reconstruction and Development.

He is author, co-author or editor of twenty books, including The RegTech Book (Wiley 2019), Reconceptualising Global Finance and its Regulation (Cambridge 2016), Financial Markets in Hong Kong: Law and Practice (Oxford, 2d ed., 2016), Finance in Asia: Institutions, Regulation and Policy (Routledge 2013), From Crisis to Crisis: The Global Financial Crisis and Regulatory Failure (Kluwer 2011) and Financial Stability, Economic Growth and the Role of Law (Cambridge 2007), and the author or co-author of more than 200 articles, chapters and reports on related subjects. His recent papers are available at SSRN where he is among the top 40 authors in the world by downloads.

About the Chair

Professor Iris H-Y Chiu

Iris H-Y Chiu is Professor of Corporate Law and Financial Regulation at the Faculty of Laws, University College London. She joined the Faculty in 2009. She is an academic member of the Centre for Ethics and Law and advances public and stakeholder engagement under the Centre's umbrella in relation to the law and regulation of the banking, financial and fintech sectors, the crypto economy and governance of business generally. She has published extensively in the areas of corporate governance and financial regulation, including The Foundations and Anatomy of Shareholder Activism (2010), Investment Management and Corporate Governance (2017), The Legal Framework for Internal Control in Banks and Financial Institutions (2015), Banking Law and Regulation (2019) and Regulating the Crypto-economy (2023). She has also published over 100 journal articles and book chapters in the UK, Europe, US and Asia. She has interests in financial regulation and governance, law and technology, corporate law and governance and the law and policy for business and finance generally. She is a Research Member of the European Corporate Governance Institute, and in 2020, a Senior Scholar at the European Central Bank’s Legal Research Programme.

About the discussant

Dr Maria Lucia Passador
Maria Lucia Passador is an Assistant Professor of Corporate Law and Financial Markets Regulation, and Visiting Professor at the University of Notre Dame, IN. She attained the National Qualification as Associate Professor in May 2022. Maria Lucia’s research interests span several areas, including corporate law, corporate governance, comparative corporate law, and empirical corporate finance. For instance, her work has been published in the NYU Journal of Law & Business, the Virginia Law & Business Review, the Brooklyn Journal of Corporate, Financial & Commercial Law, and the University of Chicago Business Law Review.

About the Centre

The UCL Centre for Ethics and Law brings together leading academics, practitioners and policy makers to support cutting edge and interdisciplinary research at the intersection of ethics and law. Subscribe to receive updates on the centre and similar events.

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