Aurelia Butler

The latest breakthroughs in artificial intelligence could lead to the automation of a quarter of the work done in the US and eurozone, according to research by Goldman Sachs.The investment bank said on Monday that “generative” AI systems such as ChatGPT, which can create content that is indistinguishable from human output, could spark a productivity boom that would eventually raise annual global gross domestic product by 7 per cent over a 10-year period.But if the technology lived up to its promise, it would also bring “significant disruption” to the labour market, exposing the equivalent of 300mn full-time workers across big economies to automation, according to Joseph Briggs and Devesh Kodnani, the paper’s authors. Lawyers and administrative staff would be among those at greatest risk of becoming redundant.They calculate that roughly two-thirds of jobs in the US and Europe are exposed to some degree of AI automation, based on data on the tasks typically performed in thousands of occupations. Most people would see less than half of their workload automated and would probably continue in their jobs, with some of their time freed up for more productive activities.In the US, this should apply to 63 per cent of the workforce, they calculated. A further 30 per cent working in physical or outdoor jobs would be unaffected, although their work might be susceptible to other forms of automation. But about 7 per cent of US workers are in jobs where at least half of their tasks could be done by generative AI and are vulnerable to replacement.Goldman said its research pointed to a similar impact in Europe. At a global level, since manual jobs are a bigger share of employment in the developing world, it estimates about a fifth of work could be done by AI — or about 300mn full-time jobs across big economies. The report will stoke debate over the potential of AI technologies both to revive the rich world’s flagging productivity growth and to create a new class of dispossessed white-collar workers, who risk suffering a similar fate to that of manufacturing workers in the 1980s.Goldman’s estimates of the impact are more conservative than those of some academic studies, which included the effects of a wider range of related technologies.A paper published last week by OpenAI, the creator of GPT-4, found that 80 per cent of the US workforce could see at least 10 per cent of their tasks performed by generative AI, based on analysis by human researchers and the company’s machine large language model (LLM).

Europol, the law enforcement agency, also warned this week that rapid advances in generative AI could aid online fraudsters and cyber criminals, so that “dark LLMs . . . may become a key criminal business model of the future”.Goldman said that if corporate investment in AI continued to grow at a similar pace to software investment in the 1990s, US investment alone could approach 1 per cent of US GDP by 2030. The Goldman estimates are based on an analysis of US and European data on the tasks typically performed in thousands of different occupations. The researchers assumed that AI would be capable of tasks such as completing tax returns for a small business; evaluating a complex insurance claim; or documenting the results of a crime scene investigation.They did not envisage AI being adopted for more sensitive tasks such as making a court ruling, checking the status of a patient in critical care or studying international tax laws. More

MEXICO CITY (Reuters) – The Bank of Mexico is expected to moderate the pace of its monetary tightening, and hike the benchmark interest rate by 25 basis points on Thursday as inflation has shown signs of cooling, a Reuters poll showed on Monday.All 20 analysts surveyed said they expect Banxico, as the Mexican central bank is known, to increase the key rate to 11.25%, in what would be the 15th rate hike in a row.Banxico’s five-member governing board unanimously voted to increase the key rate by 50 basis points to 11.00% in early February, beating market forecasts, citing a complex inflation scenario.At the time, Banxico suggested that while its rate hiking cycle was not over, future increases could be smaller.Banxico has raised its key interest rate by 700 basis points to 11.00% since its rate-hiking cycle started in June 2021 to combat inflation.Mexican consumer prices rose less than expected in early March, with annual headline inflation hitting 7.12%, down from 7.48% in the second of half of February, official data showed on Thursday. The data boosted bets Banxico could slow the pace of its rate hikes.Banxico’s scheduled Thursday decision comes after the U.S. Federal Reserve last week raised interest rates by a quarter of a percentage point, but indicated it was on the verge of pausing further increases in borrowing costs amid recent turmoil in financial markets spurred by the collapse of two U.S. banks. More

WASHINGTON (Reuters) -Top U.S. banking regulators plan to tell Congress that the overall financial system remains on solid footing after recent bank failures, but will comprehensively review their policies in a bid to prevent future collapses.In prepared testimony, Fed Vice Chair for Supervision Michael Barr said that the banking system is “strong and resilient” and depositor money is safe. And Federal Deposit Insurance Corporation Chairman Martin Gruenberg will say the state of the U.S. financial system is sound, and that most banks are not seeing a significant exit of depositor funds.However, both also said they are conducting comprehensive reviews of how their agencies monitored banks like Silicon Valley Bank and Signature Bank (NASDAQ:SBNY), which abruptly collapsed earlier this month, catching investors and regulators off guard.The prepared testimony, released on Monday, will be delivered to the Senate Banking Committee on Tuesday during a hearing on bank oversight convening at 10:00 a.m. EDT (1400 GMT).The pair also signaled that new bank rules are in the works, such as tightening up requirements for larger regional banks and how to police heavy reliance on uninsured deposits.Gruenberg said the FDIC is also reviewing the deposit insurance system, and lay out options for policy changes. The Biden administration ultimately decided to guarantee all deposits at those two banks to stave off broader panic, forgoing the existing limit of $250,000 per person.Barr said SVB’s collapse was a “textbook case of mismanagement,” citing the firm’s concentrated business model, exceedingly fast growth, failure to manage its interest rate risk, and reliance on uninsured deposits.Barr said supervisors for the Fed, which was the bank’s primary regulator, found several deficiencies with the bank in 2021 and 2022, and ultimately imposed restrictions on its growth. But, he noted, the full extent of the bank’s weakness was not apparent until the March 9 bank run, and it was up to management to address underlying issues.”It is not the job of supervisors to fix the issues identified; it is the job of the bank’s senior management and board of directors to fix its problems,” his testimony states.On regulation, Barr said the Fed is looking into whether SVB would have better managed its risk if it had still faced stricter oversight, as well as higher capital and liquidity requirements. Banks with assets between $100 billion and $250 billion saw their scrutiny relaxed as part of a 2018 bank deregulation bill.Gruenberg also defended the FDIC’s handling of SVB after its closure, in which it took over two weeks to line up a new buyer. He said the agency received only one “valid offer” for the bank’s deposits the weekend SVB failed, and it would have cost the FDIC more to sell than to liquidate the firm’s assets.Once the new relief efforts kicked in and the FDIC was given more flexibility to consider offers, Gruenberg said the FDIC received 27 bids from 18 bidders for various parts of SVB. The FDIC announced Monday it would backstop a deal for regional lender First Citizens BancShares to acquire the bank’s assets. More

Alckmin’s comments came days after the central bank’s rate-setting committee, known as Copom, kept interest rates unchanged at 13.75% for the fifth consecutive policy meeting.The central bank’s decision defied intense pressure from the new government of President Luiz Inacio Lula da Silva to reduce borrowing costs, with Lula having renewed criticism of the financial body last week.”We have to convince the central bank that it is not possible to have the highest interest rate in the world… It makes no sense at all,” Alckmin said during an event.Brazil holds the highest interest rate in real terms – which is adjusted for inflation – among the world’s major economies, according to Infinity Asset’s ranking. More