After considering the evolution of European Union (EU) regulation in tech-related fields and its implications for transatlantic financial markets, this paper specifically examines the EU AI Act and its implications for AI governance and oversight within the financial sector, including its impact on US financial institutions operating in Europe.
More specifically, we will explore the intersection between the AI Act and the ECB’s prudential supervisory tasks, assessing the obligations imposed on providers and users of high-risk AI systems within finance. The analysis focuses on the challenges and opportunities presented by the AI Act’s governance mechanisms, including the role of the AI Office and the AI Board in ensuring compliance and mitigating risks. Furthermore, the Paper delves into the operational synergy between the AI Office and the ECB, proposing pathways for collaborative regulation that ensures AI innovation aligns with financial stability and ethical standards. The research highlights the critical need for a cohesive supervisory approach that balances the innovative potential of AI with the prudential demands of financial supervision, offering strategic policy recommendations to enhance oversight capabilities while safeguarding the integrity of the financial system. This Paper contributes to the academic discourse by providing insights into the evolving regulatory landscape, with particular attention to navigating the challenges of AI integration in finance from both European and US perspectives.