ECB chief economist: European financial system is not suitable for the era of artificial intelligence

On March 24, European Central Bank chief economist Lien said that Europe's reliance on bank financing has hindered the innovative development in Europe with artificial intelligence as its core. Lane said that is why governments must urgently advance the long-envisioned savings and investment union. This adds arguments to the idea of closer cooperation among the 27 EU member states. Lane pointed out: "The eurozone's bank-centric financial system does not match the scale and nature of AI opportunities. Bank-based financing is structurally less suitable for intangible, long-term investments, and alternative channels such as venture capital and private credit are too weak in the eurozone." He said a "deeper, more integrated capital market is needed that can expand the investor base for intangible asset-intensive projects, promote cross-border risk sharing, and reduce the need for bank financing."