Truly Risk‑Based Regulation of Artificial Intelligence - How to Implement the EU's AI Act

“... the paper analyses (i) how the AI Act should be applied and implemented according to its original intention of a risk-based approach, (ii) how the AI Act should be complemented by sector-specific legislation in the future to avoid inconsistencies and over-regulation, and (iii) what lessons legislators around the world can learn from the AI Act in regulating AI.”

Climate Change Risk Indicators for Central Banking: Explainable AI in Fire Risk Estimations

This paper refines wildfire risk assessment methodologies for the European Central Banks, focusing on the Fire Weather Index, land cover types, and climate data. Using logistic regression and xgboost models, it projects a 12% increase in high-risk areas by 2050, emphasizing advanced models' importance for accurate financial risk evaluation.

Robust convex risk measures

"We study the general properties of robust convex risk measures as worst-case values under uncertainty on random variables. We establish general concrete results regarding convex conjugates and sub-differentials. We refine some results for closed forms of worstcase law invariant convex risk measures under two concrete cases of uncertainty sets for random variables: based on the first two moments and Wasserstein balls."

Application of Natural Language Processing in Financial Risk Detection

This paper introduces Natural Language Processing (NLP) concepts, text mining, and model design principles, detailing text preprocessing and feature extraction. Empirical research shows the model's excellent performance in risk identification and prediction, enhancing financial risk management accuracy and efficiency.

DORA: Challenges and Some Reflections on the Adequacy of Europe’s Architecture for Financial Supervision

The paper reviews the DORA Regulation, highlighting challenges in supervisory convergence, solution centralization, and oversight fragmentation. It argues that despite DORA's positive steps for digital resilience, Europe's fragmented supervision system hampers its effectiveness. The authors suggest that a more centralized, cross-sectoral supervisory approach is needed for better regulation and supervision.

Digital Innovation and Banking Regulation

The EU aims to foster digital transformation across sectors by 2030 through legislation on AI, cloud computing, and crypto-assets. However, compared to ESG, banking regulation lacks a clear framework for managing digital risks and supervisory assessment. This paper discusses digital innovation in banking, proposing risk-based Pillar 2 prudential framework and harmonized Pillar 3 disclosures to address this gap.