Signage on a fence at the Nscale data center project in Barstow, Texas, on Oct. 15, 2026.<\/p>\n
Eli Hartman | Bloomberg | Getty Images<\/p>\n
Threats from artificial intelligence topped the list for greatest risks to the financial system, far exceeding any other dangers, according to respondents who participated in a Federal Reserve survey released Friday.<\/p>\n
The central bank’s twice-yearly look at a variety of dangers saw a surge in respondents saying that the biggest danger comes from AI along several fronts including debt, stock market valuations and security risks.<\/p>\n
“Respondents noted three distinct areas of concern: (1) elevated equity valuations and the possibility that lower-than-expected earnings could result in lower valuations and a market correction; (2) cybersecurity risk, stemming from either a malicious attack by sophisticated state actors or damage caused by frontier AI models themselves; and (3) risks associated with complex forms of AI-related financing,” the report stated.<\/p>\n
The report comes with Wall Street on edge over high-flying AI hyperscalers, while communities are on alert for the rapid spread of data centers used to power the technology. Some 56% of voters in this month’s midterm elections said data centers were of crucial or major importance in their choices, according to exit polling.<\/p>\n
Respondents to the Fed survey released Friday include a variety of market participants, economists, analysts and institutional sources. The report covers the period up to Oct. 28, just a few days shy of the election.<\/p>\n
Of the group, 87% cited AI as a “salient risk” to the system. That was up from 50% in the survey during the spring of this year and well ahead of the next most-cited danger, a risk asset correction, which was mentioned by 52% of those surveyed. <\/p>\n
Other leading risks were higher long-term rates (48%), cyberattacks (43%) and fiscal debt sustainability (43%), the latter coming with the U.S. debt over $40 trillion and the budget deficit near $2 trillion.<\/p>\n
The report otherwise found the system fairly stable, though it mentioned that hedge fund leverage is at its highest since 2013 and concentrated on a relatively small group. <\/p>\n","protected":false},"excerpt":{"rendered":"Signage on a fence at the Nscale data center project in Barstow, Texas, on Oct. 15, 2026. Eli…\n","protected":false},"author":2,"featured_media":969750,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,276,277,879,6826,161,49,48,46,61],"class_list":["post-969749","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-breaking-news","tag-breaking-news-economy","tag-business-news","tag-ca","tag-canada","tag-economy","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/969749","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=969749"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/969749\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/969750"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=969749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=969749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=969749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}