Antonio Coppola (Stanford GSB): Financial Regulation and AI: A Faustian Bargain?

Please join us for a seminar of the Advanced Financial Technologies Laboratory (AFTLab):

Time: Thursday, February 19, 2026, 5:00pm-6:00pm

Location: Huang 305

Speaker: Antonio Coppola (Stanford GSB)

Title: Financial Regulation and AI: A Faustian Bargain?

Abstract: We study the optimal use of applied AI in financial regulation. Central banks now observe granular holdings data that reveal, in near real time, the details of portfolio exposures across the financial system. We show that high-dimensional forecasting models applied to this data can improve the targeting of macroprudential interventions when paired with structural knowledge about policy transmission. In a tractable equilibrium fire-sales model, we show that the optimal macroprudential policy depends on both structural elasticities to the policy instruments and on sufficient statistics that summarize the cross-sectional pattern of forced-selling pressure in the absence of policy intervention. Reduced-form predictive models that accurately identify these sufficient statistics generate welfare gains by improving policy targeting. Empirically, we introduce and train a graph-based, attention-augmented deep learning model tailored to financial positions data, and we discuss why this architecture is optimally suited to this problem. The model learns latent representations for both assets and investors by explicitly modeling the network structure of portfolio holdings. We show that this architecture delivers out-of-sample forecasts of trading behavior with state-of-the-art predictive accuracy, including during crisis episodes, providing a practical framework for estimating the sufficient statistics that enter the optimal policy targeting rule.

Bio: Antonio is an Assistant Professor of Finance at the Stanford Graduate School of Business. His research focuses on international macroeconomics and finance. He has worked on topics including the role of applied AI in financial regulation, global capital flows, tax havens, financial stability, and reserve currencies. He is also a Research Affiliate at the Centre for Economic Policy Research (CEPR), a Faculty Fellow at the Stanford Institute for Economic Policy Research (SIEPR), and a Research Principal at the Global Capital Allocation Project (GCAP). He serves as an Associate Editor at the Journal of the European Economic Association (JEEA). He received his PhD in Economics from Harvard University.

More information on the Advanced Financial Technologies Laboratory (AFTLab):
https://fintech.stanford.edu/
and upcoming seminars:
https://fintech.stanford.edu/events/series/aftlab-seminars