Existing Financial Tools Remain Effective for AI Risks, Says Zhou Xiaochuan

China News Service reported that former People's Bank of China governor Zhou Xiaochuan addressed market discussions regarding whether artificial intelligence developments could trigger systemic financial risks. Speaking in Beijing on October 22, he stated that the financial sector has long maintained mature risk management mechanisms and should continue utilizing existing tools, which remain effective now and for a period ahead. At the closing ceremony of the 2026 Financial Street Forum annual conference, Zhou stated that central banks must preserve their core functions during technological shifts while securing safety and efficiency across the financial system. Amid global transformations and technical progress, central banks must evaluate their role in policymaking and strike a balance between independence and coordination to safeguard economic stability. Zhou stated that higher central bank independence benefits price stability, whereas financial stability and opening-up policies necessitate close coordination with other government authorities. Describing the monetary policy structure as a feedback mechanism reliant on incoming data, he explained that decisions to adjust interest rates or shift policy directions stem from continuous observation and responsive feedback rather than one-way commands. Former president of the Dutch central bank Klaas Knot also addressed the forum, stating that central banks face pressure more frequently today. He remarked that such conditions do not demand different frameworks, but rather require officials to account for a more intricate operational landscape when putting their established frameworks into practice.