Technological and Economic Threats to the U.S. Financial System. An Initial Assessment of Growing Risks
Abstract
The resilience and stability of the U.S. financial system is critical to economic prosperity. However, the rapid pace of technological and geopolitical change introduces new potential threats that must be monitored and assessed. This report explores emerging and understudied threats to the financial system, focusing on risks from social media, advances in artificial intelligence, and from the changing role of economic statecraft in geopolitics. Drawing on historical examples, the economic literature, and discussions with subject-matter experts, we assess the potential costs and likelihood of four threats: attacks on financial trading models, bond dumping by foreign holders of U.S. debt, using deepfakes to spread misinformation, and memetic engineering to manipulate beliefs and behaviors. Our analysis suggests these threats pose a limited near-term risk of significant economic damage because of the interconnectivity of global finance and existing safeguards. However, the gradual erosion of financial resilience and institutional trust over time could make attacks more impactful.
Document Details
- Document Type
- Technical Report
- Publication Date
- Feb 14, 2024
- Accession Number
- AD1221345
Entities
People
- Anton Shenk
- Gabriel Leonard
- James V. Marrone
- Joshua Steier
- Lydia Grek
- Tobias Sytsma
Organizations
- RAND Corporation