Fed’s Bowman flags rising AI risks to banks, calls for coordinated oversight

Fed Vice Chair for Supervision Michelle Bowman told an FSOC roundtable that regulators must coordinate as AI tools rapidly enter the banking system, warning defensive AI can be repurposed as an attack tool. The warning signals heightened crypto risk: CEXs, DeFi protocols and crypto security teams face larger AI-driven attack surfaces and may attract stricter regulatory scrutiny. Greater cross‑agency oversight could drive compliance costs and security upgrades across traditional finance and crypto, affecting adoption and operational models.