" Predictive machine learning algorithms used in banking environments, especially in risk and control functions, are generally subject to regulatory and technical constraints limiting their complexity. Knowledge distillation gives the opportunity to improve the performances of simple models without burdening their application, using the results of other - generally more complex and better-performing - models."
"... our empirical evidence indicates that political risk significantly a firm’s operational risk strategy in terms of managing its customer concentration risk."
"This paper first reports on proposed and enacted transatlantic AI or algorithmic audit provisions. It then draws on the technical, legal, and sociotechnical literature to address the who, what, why, and how of algorithmic audits, contributing to the literature advancing algorithmic governance."
"Our findings show that demand is overall higher to insure separate risks than to cover all risks together in a bundled insurance policy in the UK, whereas no significant difference is found between demand for bundled insurance and single policy insurance in the Netherlands. This difference in preference across the two countries is partly associated with whether individuals have been flooded in the past, which is more often the case in the UK than the Netherlands."
"Using Cat bonds to transfer catastrophe risk substitutes not only the use of Cat reinsurance but also non-Cat reinsurance in the hard market, implying Cat bonds affect a ceding insurer’s diversification in both Cat and non-Cat lines of business in the reinsurance market."
"... we contribute both empirically and conceptually to a better understanding of the nexus of AI and regulation and the underlying normative decisions. A comparison of the scientific proposals with the proposed European AI regulation illustrates the specific approach of the regulation, its strengths and weaknesses."
"... most modified coinsurance is purchased from reinsurers located in countries with lower regulatory capital requirements and within the same insurance holding group. Our findings expose how insurers use reinsurance to obfuscate their asset risk."
"The European Artificial Intelligence Board (EAIB) would be established as a new enforcement authority at the Union level. National supervisors will flank EAIB at the Member State level. Fines of up to '6% of global turnover, or 30 million euros for individual corporations' can be imposed."
"... there is a risk that the EU’s Network and Information Systems Directive (‘NIS Directive’) might lead to only incremental improvements in the cybersecurity of Europe’s critical infrastructure and digital services, while generating substantial compliance activity, aimed at placating regulators and reassuring the general public."
"... a growing domestic emphasis from the central government on promoting innovation through weakening checks will undermine the efficacy and ethical permissibility of initiatives. Likewise, the success of AI governance initiatives will be heavily influenced by decisions made in other jurisdictions, including the European Union. If left unaddressed, these factors risk transforming the UK into a reluctant follower, rather than a global leader, in AI governance."