Fascinating AI, Crypto, And Scary Stagflation

Mike Leslie
May 24, 2024

Nasdaq has integrated a new AI-powered feature into its Market Surveillance technology, which aims to significantly enhance market abuse investigations.

Inputs that matter: The technology utilizes generative A.I. (GenAI) to streamline the investigative procedures around suspected market manipulation and insider trading, enabling more effective monitoring and detection of potential market abuse.

  • With proof-of-concept testing showing a 33% reduction in investigation time, Nasdaq plans to implement the functionality across its U.S. equity market surveillance.

The opportunity: "Market abuse is a substantial global challenge and demands increasingly sophisticated solutions to address it," commented Ed Probst, Senior Vice President and Head of Regulatory Technology at Nasdaq.

  • "As a major regulatory technology provider to the world's financial system, with a deep culture of innovation, Nasdaq is uniquely placed to leverage the power of technology to enhance further the tools and capabilities necessary to uphold the integrity of marketplaces globally."

Zoom in: Regulators worldwide mandate financial institutions to demonstrate the continuous effectiveness of their surveillance systems and controls.

  • Nasdaq's enhanced functionality, built on Amazon Bedrock, an AWS service for secure GenAI applications, enables analysts to swiftly perform detailed initial assessments of alerts by distilling, analyzing, and interpreting relevant information.
  • "By drawing on the latest innovation in cloud technology and artificial intelligence, we can better respond to new threats and offer the global financial system advanced tools to tackle market abuse more effectively," said Tony Sio, Head of Regulatory Strategy and Innovation at Nasdaq.

Between the lines: Meanwhile, in what is a monumental development for the digital asset sector, the U.S. House of Representatives has passed the FIT21 Crypto Bill.

  • The Financial Innovation and Technology for the 21st Century Act (FIT21) marks the first time a major crypto bill has cleared one of Congress's chambers.
  • The legislation would establish a regime to regulate the U.S. crypto markets, set consumer protections, install the Commodity Futures Trading Commission (CFTC) as a leading regulator of digital assets and the watchdog of the non-securities spot markets, and more clearly define what makes a crypto token a security or a commodity.
  • Specifically, the White House admitted that they did not support the legislation but would not veto the bill if it reached the desk of the President.

Follow the money: Recently, JPMorgan Chase's CEO, Jamie Dimon, said a "hard landing" for the U.S. cannot be ruled out.

  • Speaking at the JPMorgan Global China Summit in Shanghai, he told CNBC that the worst outcome for the U.S. economy would be a "stagflation" scenario, in which inflation continues to rise, but growth slows amid high unemployment.
  • Inflation is stickier than people think.

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Read More

  1. https://a-teaminsight.com/blog/nasdaq-unveils-ai-powered-feature-to-enhance-market-surveillance/
  2. https://watcher.guru/news/us-house-passes-fit21-crypto-bill
  3. https://www.coindesk.com/policy/2024/05/22/us-house-approves-crypto-fit21-bill-with-wave-of-democratic-support/
  4. https://www.cnbc.com/2024/05/23/jpm-jamie-dimon-us-could-see-hard-landing-stagflation-is-worst-outcome.html