Excellent breakdown of the regulatory lag here. The correlated failure risk is what realy concerns me - if everyone's running similar models and they all break under stress simultaneously, traditional stress tests wont catch it. I remember reading about algorithmic collusion research last year and thinking regulators were way behind. The shift from point-in-time audits to real-time oversight seems inevitable now, even if it takes a crisis to get there.
Excellent breakdown of the regulatory lag here. The correlated failure risk is what realy concerns me - if everyone's running similar models and they all break under stress simultaneously, traditional stress tests wont catch it. I remember reading about algorithmic collusion research last year and thinking regulators were way behind. The shift from point-in-time audits to real-time oversight seems inevitable now, even if it takes a crisis to get there.
Thanks! I appreciate it.
I agree that point-in-time oversight can't really work in an agentic environment... The road to real-time regulation is likely to be rocky..