Speeches by Grady.

“This question is for Mr Geale and Ms Rusu. One of the big things people ask about is transparency and explainability in decisions, which is an aspect of the consumer duty. How would you go about assessing whether a firm’s AI decision making had sufficient transparency and explainability?”

“Are you confident that the people you are coming across in the industry fully understand the risks of this?”

“That is algorithms, but moving on to AI, are any of you aware of action being taken where you have intervened with a firm and said, “Look, you do not have the right management structures in place,” or, “We have had these discussions with you—you are clearly not across the detail of how this works, and this carries too …”

“This may be a question for the FCA—Ms Rusu or Mr Geale—about the management structures around this to make sure that senior management properly understand the risks. Are you minded to change what you require and have a new senior management function dedicated to AI or something like that?”

“Obviously, you have put a bit of work into understanding it, but are you content that all the institutions that you regulate have people who have sufficient understanding of this, given what you said about people working on understanding as they implement it?”

“They can be aware of those risks, but help me out a little bit: do you think businesses actually understand this to a sufficient degree? When you have discussions with the financial services industry, are you confident that the people you are talking to have the requisite level of understanding of AI—the pros and cons,…”

“How are you going about understanding that? Just talk me through that in simple terms.”

“What I take from what you said there, Mr Mutton, is that there is work ongoing to understand these issues. It necessarily follows that that work is not complete. Are you worried that things are being deployed with insufficient understanding in the industry?”

“How would you recommend that we go about controlling for when the model is changed?”

“Mr Mutton, do you have anything to add?”

“On the risks piece, is it that if it is a low-risk deployment, you don’t need to understand as much, whereas if you are betting a bank’s balance sheet on something, you jolly well do need to understand? Is that what you are getting at?”

“This is all very exciting but, starting at first principles, the way Sandra Wachter—a professor of technology and regulation at the University of Oxford—has described the problem is that not even those who build the system fully know what goes on inside the black box. With a quick yes or no, perhaps working along the t…”

“This is a question for Mr Hall and Mr Mutton. Is AI-driven trading, in particular autonomous AI market trading, being used? Is it a concern? At what point would you intervene in regulating it?”

“Have you done any contingency planning for an AI-driven market crash?”

“A question for Ms Miller: the UK has suffered a range of significant shocks—the financial crisis, Brexit, covid and Ukraine—and we can see debt-to-GDP rising alongside those shocks. Does it necessarily follow that the public finances are now in a state where we would struggle to withstand a further shock in the same wa…”

“Escaping reliefs for a moment and looking at the macro position, Professor Advani, how does our tax burden compare with countries with similar levels of public services, pensions and welfare systems?”

“You are making a fundamental point. We couldn’t have a fundamental overnight reform because everything takes time to implement. Unless we start doing it now, we will not have a much better, more effective tax system in five years’ and 10 years’ time, and we will still be stuck in this doom loop of low growth, low publi…”

“In Scrabble, “simplicity” gives you 19 and “growth” gives you 13, by the way, Mr Neidle. Just to sum up this chapter of evidence, what you are all saying is that it is very clear that we have an overly complex tax code and, if we simplified it and did the hard yards of simplifying it properly, that would give us more g…”

“A quick yes/no to finish up. What I have taken from this session is that, first of all, we have got a real issue because certain taxes, like fuel duty, have ceased to raise revenue. That is a challenge. The tax system is not encouraging growth; it is inhibiting growth. With modelling and stuff, we can look to tackle th…”

“Quickly coming back to the wealth tax and the discussion on that, this is a yes or no answer, please. The point is: wealth is mobile, and money is mobile around world, after all. We are just a small island off the north coast of Europe, albeit a reasonable sized economy. If we want to tax wealth and introduce other tax…”