Regulators Eyeing Tech To Boost Financial Stability

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Regulators around the globe are eyeing tech to boost financial stability

Enhanced supervisory technology (SupTech) with strong governance and skilled human oversight could well have important benefits for financial regulators around the in efforts to increase economic stability in their nations and around the globe, said a report prepared for the G20.

“SupTech could improve oversight, surveillance and analytical capabilities, and generate real time indicators of risk to support forward looking, judgement based, supervision and policymaking,” regulators told the Financial Stability Board.

Importantly as well, real-time and non-traditional data may allow authorities to be more pro-active in their supervision, FSB said.

As an example of the efficiencies SupTech can provide financial regulation, the authors of the report pointed out the U.S. Securities and Exchange Commission has found

algorithms are five times better than random testing at identifying language in investment adviser regulatory filings that could merit further investigation for potential wrongdoing’

The possible improvement in quality arising from automation of previously manual processes has significant appeal to the overseers, the FSB reported in a study released today.

The use of SupTech innovations and strategies in regulatory reporting for microprudential regulation has grown significantly in the last four years, the authors found.

Artificial intelligence was the most commonly deployed application of SupTech.

National financial regulators surveyed by the FSB lauded SupTech’s potential for gains in the effectiveness and efficiency of oversight and improvements in risk management and compliance.

But the risk of handing too many of their functions to technology vendors and the potential for poor data quality were on the minds of the regulatory leaders responding to a poll and other resources consulted by the FSB’s Financial Innovation Network.

“(They were particularly concerned) over-reliance on methods built on historic data could lead to incorrect inferences about the future,” the study

Increasing stability decreases ocean productivity, reduces carbon burial

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Increasing stability decreases ocean productivity, reduces carbon burial
Warming ocean surfaces will decrease the oxygen in the upper oceans and decrease bioproductivity, impacting the food source for dolphins and others that rely on fish and sea life. Credit: NOAA

As the globe warms, the atmosphere is becoming more unstable, but the oceans are becoming more stable, according to an international team of climate scientists, who say that the increase in stability is greater than predicted and a stable ocean will absorb less carbon and be less productive.


Stable conditions in the atmosphere favor fair weather. However, when the ocean is stable, the layers of the ocean do not mix. Cooler, oxygenated water from beneath does not rise up and deliver oxygen and nutrients to waters near the surface, and warm surface water does not absorb carbon dioxide and bury it at depth.

“The same process, global warming, is both making the atmosphere less stable and the oceans more stable,” said Michael Mann, distinguished professor of atmospheric sciences and director of the Earth System Science Center at Penn State. “Water near the ocean’s surface is warming faster than the water below. That makes the oceans become more stable.”

Just as hot air rises, as is seen in the formation of towering clouds, hot water rises as well because it is less dense than cold water. If the hottest water is on top, vertical mixing in the oceans slows. Also, melting ice from various glaciers introduces fresh water into the upper layers of the oceans. Fresh water is less dense than salt water and so it tends to remain on the surface as well. Both elevated temperature and salinity cause greater ocean stratification and less ocean mixing.

“The ability of the oceans to bury heat from the atmosphere and mitigate global warming is made more difficult when the ocean becomes