BPI and IIB Comment on Responsible Adoption of Artificial Intelligence

Ladies and Gentlemen:

The Bank Policy Institute^[1] and the Institute of International Bankers^[2] welcome the opportunity to provide feedback on the Financial Stability Board's consultation report Sound Practices for Responsible Adoption of Artificial Intelligence.^[3] The Sound Practices will be instructive to banking regulators globally as the regulatory and supervisory frameworks for financial institutions' use of AI continues to evolve. The FSB has a unique opportunity to foster greater harmonization and interoperability in global regulatory frameworks by promoting consistent, coordinated implementation of the Sound Practices.

Given the rapid evolution of AI technologies, it is critical that regulators promote competition and economic growth by providing banks with the ability to remain agile and move quickly as technology changes. Regulators should avoid imposing restrictive, bank-specific requirements that place financial institutions at a competitive disadvantage relative to nonbank firms. Subjecting banks to heightened and prescriptive supervisory expectations while nonbank competitors face no equivalent framework risks discouraging banks from responsibly adopting AI and shifting activity to less regulated parts of the market. Moreover, any systemic risks posed by AI adoption are just as likely to arise in non-banking areas of the economy; if regulatory intervention is believed to be an effective way to manage this risk, it should be extended to critical infrastructure generally rather than confined to banks. A level playing field requires regulators to apply comparable standards to comparable risks across both bank and nonbank providers.

Banks are committed to using AI responsibly in their businesses and operations and have long used traditional AI and machine learning tools to support critical risk management functions. The emergence of and rapid advancements in generative AI, agentic AI and frontier models have created new opportunities for financial institutions to improve AML, fraud prevention, cybersecurity, customer service and internal productivity, among other capabilities. As Federal Reserve Board Vice Chair for Supervision Michelle W. Bowman recently noted, "AI has become an integrated part of [the FRB's] daily experience. Financial institutions are developing their own applications and implementing vendor-assisted tools. Banks of all sizes benefit from its greater efficiency, speed, and content generation. Whether used in targeted modeling or enterprise-wide tools, AI will become a force multiplier for the financial system, and in the broader U.S. economy."^[4]

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[1] BPI is a nonpartisan public policy, research and advocacy group that represents universal banks, regional banks, and major foreign banks doing business in the United States. BPI produces academic research and analysis on regulatory and monetary policy topics, analyzes and comments on proposed regulations, and represents the financial services industry with respect to cybersecurity, fraud, and other information security issues.

[2] The Institute of International Bankers represents the U.S. operations of internationally headquartered financial institutions from more than 35 countries around the world. The membership consists principally of international banks that operate branches, agencies, bank subsidiaries, and broker-dealer subsidiaries in the United States. The IIB works to ensure a level playing field for these institutions, which are an important source of credit for U.S. borrowers. These institutions also enhance the depth and liquidity of U.S. financial markets and contribute significantly to the U.S. economy through direct employment of U.S. citizens, as well as through other operating and capital expenditures.

[3] Financial Stability Board, Sound Practices for Responsible Adoption of Artificial Intelligence (June 10, 2026), https://www.fsb.org/uploads/P100626.pdf (hereinafter the "Report").

[4] Vice Chair Michelle W. Bowman, Remarks at the Federal Reserve Board, Federal Reserve (May 1, 2026), https://www.federalreserve.gov/newsevents/speech/bowman20260501a.htm ("Bowman Remarks").