EC Proposes Regulatory Framework for Artificial Intelligence
EC proposed a regulatory framework, along with the revised Coordinated Plan, for artificial intelligence in EU. The proposed regulation lays out harmonized rules for the development, market placement, and use of artificial intelligence systems, using a proportionate risk-based approach. Through this regulation, EC is proposing single future-proof definition of artificial intelligence. The Coordinated Plan outlines the necessary policy changes (also covers EU-wide data, cloud, and climate risk strategy) and investment at member state level to strengthen the leading position of Europe in the development of sustainable, secure, inclusive, and trustworthy artificial intelligence.
Proposed regulation on artificial intelligence. The proposal presents a balanced and proportionate horizontal regulatory approach to artificial intelligence that is limited to the minimum necessary requirements to address the risks and issues linked to artificial intelligence, without unduly constraining or hindering technological development or otherwise disproportionately increasing the cost of placing artificial intelligence solutions on the market. The proposed rule will be enforced through a governance system at member state level, building on already existing structures and a cooperation mechanism at EU level with the establishment of a European Artificial Intelligence Board. Additional measures are also proposed to support innovation, particularly through artificial intelligence regulatory sandboxes and other measures to reduce the regulatory burden and to support small and medium-size enterprises (SMEs) and startups. Specifically, the proposed regulation lays out:
- Harmonized rules for the placing on the market, the putting into service, and the use of artificial intelligence systems EU
- Prohibitions of certain artificial intelligence practices
- Specific requirements for high-risk artificial intelligence systems and obligations for operators of such systems
- Harmonized transparency rules for artificial intelligence systems intended to interact with natural persons, emotion recognition systems, biometric categorization systems, and artificial intelligence systems used to generate or manipulate image, audio, or video content
- Rules on market monitoring and surveillance
Coordinated plan on artificial intelligence. This comprehensive update of the Coordinated Plan, which was first published in 2018, proposes concrete joint actions for collaboration to ensure all efforts are aligned with the European Strategy on artificial intelligence and the European Green Deal, while considering the challenges brought by the COVID-19 pandemic. It aims to spur the implementation of national artificial intelligence strategies, remove fragmentation, and address global challenges. As part of the key proposed actions in this plan, EC is expected to propose a legislative action on horizontal framework on trustworthy artificial intelligence by the second quarter of 2021. EC is also expected to bring artificial intelligence into play for climate and environment by developing a roadmap for a common European Green Deal data space to exploit the major potential of data for sustainability and climate adaptation, creating a data space for climate-neutral and smart communities and validate through pilots focusing on European Green Deal action areas, and by starting to explore key performance indicators to identify and measure negative environmental impact of artificial intelligence. Appendix 1 to the plan sets out timeline for the key proposed actions.
Related Links
- Press Release
- Proposed Regulation on Artificial Intelligence
- Coordinated Plan on Artificial Intelligence
- Q&A on Proposal and Plan
Keywords: Europe, EU, Banking, Insurance, Securities, Artificial Intelligence, Proportionality, Q&A, European Green Deal, Regulatory Sandbox, Climate Change Risk, Sustainable Finance, EC
Featured Experts
Michael Denton, PhD, PE
Dr. Denton provides industry leadership in the quantification of sustainability issues, climate risk, trade credit and emerging lending risks. His deep foundations in market and credit risk provide critical perspectives on how climate/sustainability risks can be measured, communicated and used to drive commercial opportunities, policy, strategy, and compliance. He supports corporate clients and financial institutions in leveraging Moody’s tools and capabilities to improve decision-making and compliance capabilities, with particular focus on the energy, agriculture and physical commodities industries.
Previous Article
SRB Publishes Resolution Planning Cycle Booklet for 2021Related Articles
EBA Publishes Final Regulatory Standards on STS Securitizations
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
ECB Further Reviews Costs and Benefits Associated with IReF
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
EBA Publishes Funding Plans Report, Receives EMAS Certification
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.
IOSCO Welcomes Work on Sustainability-Related Corporate Reporting
The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)
BoE Allows One-Day Delay in Statistical Data Submissions by Banks
The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.
ACPR Amends Reporting Module Timelines Under EBA Framework 3.2
The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.
ECB Paper Discusses Disclosure of Climate Risks by Credit Agencies
The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)
APRA to Modernize Prudential Architecture, Reduces Liquidity Facility
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.
