THE next financial shock may not begin with a queue outside a bank and a nervous fund manager or a trader shouting “sell”.

It could begin quietly, when several computer models read the same piece of bad news, reach the same conclusion, and start moving money in the same direction before humans fully understand what is happening.

In a July 23 blog, International Monetary Fund (IMF) Financial Counsellor Tobias Adrian warned that artificial intelligence (AI) is becoming part of how financial institutions assess borrowers, price risk, and respond to market stress. That can make finance faster and more efficient. Under stress, however, it could make shocks spread more quickly and become harder to diagnose.