Markets: Lagarde says that if optimism about AI wanes, it will also have an impact on Europe
‘History advises caution’
In the United States, technology-related investment has surpassed the levels seen during the dot-com bubble, and seven companies account for almost a third of the entire market, with a corresponding increase in their debt levels. “History advises caution,” warned ECB President Christine Lagarde, speaking at the 19th edition of the Cotec Europa symposium, “Rethinking Work in the Age of AI: Transformation, Opportunities and Governance”, currently taking place in Venice. “When share prices and private debt rise significantly together, one in seven times we see a financial crisis within two years,” she added. “Today, the growth in private debt is contained and we are not seeing the emergence of such a crisis,” she noted, “but the direction of travel requires attention”, not least because “Europe will not remain a bystander if optimism suddenly disappears”. If the AI boom were to collapse, he concluded, the consequences “would not stop at the shores of the Atlantic: it would mean more expensive loans, less confidence and, ultimately, job losses and a decline in savings”.
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