Austan Goolsbee: belief

Transcript context

…What should the regional Feds be doing managerially to prepare for the arrival of AGI? Or just very strong AI, whatever you want to call it. I don’t know. I’m still curious, and I hope we’ll . . . Let’s have a little extended discussion about AI, and what it means for productivity, and how real is it? The thing that banks do — I always say it’s a handful of things. It’s five basic functions, one of which is monetary policy. I consider that the opposable thumb. That’s what separates us from the animals. You’ve got monetary policy, and then there’s directing the payment system of the United States. People probably don’t understand, unless they get into it, that the plumbing of the financial system — wired transfers, ACH direct deposit, FedNow — there’re a whole bunch of payment system things that are operated by the Fed system that are critically important. The biggest thing in terms of employees is bank supervision and regulation and oversight to make sure that our official banks are safe and sound. We are a bank to banks, so the fourth is financial services, like we send cash for their ATM machines. We do a whole bunch of financial services for the member banks. Then the fifth is to participate, be upstanding members of the community. We have a community development function. We have a regional economics focus. We are absolute experts in Chicago, for example, on the auto industry. We have by far the most auto production and the highest manufacturing intensity of all the districts, so we have expertise in that. I think all five of those are quite important that we maintain them. Where AI fits in — I could see it fitting in supervision and alerting you, at least red flagging, here’s a place to look more. As of now, though, there is a rule forbidding the use of AI tools for general Fed usage, and I understand it. If you take secret information, confidential information, and start plugging it into these and it starts getting out, I think that would be a problem. You could put this on your hard drive, right? We’re very close to being able to do that. The Fed has incredible data. You could take everything, all the Feds know about banking failures, build an AI, keep it on the Fed hard drive, and they would do much better than any human in predicting bank failures.…

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