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AI-Cafe presents: AI Trading and Market Manipulation - Challenges for Financial Regulators
Alessio Azzutti
Research Associate at the Centre for Banking and Finance Law at the National University of Singapore
As in other sectors of our economy, AI has entered the financial trading scene as a real game changer. AI is proposed to deliver several benefits to capital markets, making them faster, more liquid and cost-effective, thus perhaps more efficient. Yet AI-powered trading may expose capital markets to new sources of instability and failure. In the latter regard, increasingly capable and autonomous AI trading systems and strategies threaten market integrity in unique and significant ways.
Focusing on the dark side of AI trading, this talk will address innovative and challenging questions such as: Can AI autonomously discover and perpetrate forms of market manipulation without any prior human intent? And how does existing financial regulation address the risks associated with autonomous, black-box AI? In particular, who will be held liable for damages and crimes committed by AI? How to monitor AI trading behaviour and prevent misconduct? Are financial supervisors able to detect abnormal trading activities and investigate suspected cases of AI-optimized manipulation? In other words, where do financial regulators stand on protecting market integrity in algorithm-dominated capital markets?
Alessio Azzutti currently serves as a Research Associate at the Centre for Banking and Finance Law at the National University of Singapore. He is also a PhD candidate at the University of Hamburg, School of Law. Before moving to Singapore, he was a Research Associate in the “Law, Finance, & Technology” programme at the Institute of Law & Economics (University of Hamburg) between January 2019 and December 2021.
Alessio holds an LLM in Law & Economics from Utrecht University (2018) and an MSc in Finance and Risk Management from the University of Florence (2016).
His current research focuses on the implications of technological innovation for banking, payments, capital markets law and regulation from an interdisciplinary perspective. Alessio is also Research Member at the Centre for AI and Digital Policy, Spring 2023 Cohort, a Research Fellow at the Hamburg Network for AI & Law, and a Member of the European Banking Institute Young Researchers Group.