BIS chief warns AI capex arms race relies on opaque debt, posing systemic risks
Pablo Hernandez cited historical railway and dot-com bubbles to caution that spending driven by hype over actual profits risks broad economic corrections.
Source: CoinDesk
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DW NOTE
The BIS spent decades engineering the regulatory architecture that let banks lever client deposits into speculative loan books, then calls AI capex an "arms race" when tech firms do the same with corporate bonds. Hernandez is right that hype-funded buildouts end badly — but central banks created the debt market that makes them possible.