FI: AI boom is vulnerable

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FI: AI boom is vulnerable
Photo: Anna Tärnhuvud/SVD/TT

High expectations for AI have driven up stock markets and a correction risks, in the worst case, triggering global financial stress, warns the Swedish Financial Supervisory Authority in its stability report.

In its second stability report of the year, the authority writes that the market, where a few large AI and tech companies have driven the stock market upswing, is vulnerable. If there were to be a sharp correction in the stock market, it could cause global financial stress that would also spread to Sweden.

The authority also notes that risk-taking in the stock market has increased sharply since the unrest last spring.

Furthermore, the Swedish Financial Supervisory Authority writes that there is still a recession in Sweden, but recovery is starting to appear.

"We have seen signs of a recovery and going forward, lower interest rates and stronger income development will strengthen household finances. However, given the global situation and a deteriorating security situation, the development is uncertain," says Malin Alpen, acting Director General of FI, in a press release.

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By TTEnglish edition by Sweden Herald, adapted for our readers

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