{"id":35407,"topic":"ai","source":"American Banker","title":"Why do US bankers want more AI regulation than Europeans? - American Banker","url":"https://www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans","url_hash":"f0676e28d46c4d657ca9eb5149f933a08c7f7ddd","author":"","summary":"Why do US bankers want more AI regulation than Europeans? American Banker","content":"- Key insight: In the U.S., bankers are used to prescriptive rulemaking, and without it they seem uncertain about how to move forward with AI. Europe tried writing prescriptive AI rules, and they were a disaster. Now nobody knows how to move forward.\n- Expert quote: In December, the U.K.'s FCA Chief Executive Nikhil Rathi declined to create new AI-specific rules, calling AI a technology where \"the frontier is moving every three to six months.\"\n- Forward look: The answer is neither an innovation-led approach nor a regulation-first\n model but a fundamentally different relationship between regulator and regulated, one that is continuous, adaptive and built for the speed of AI rather than the speed of legislation.\nAsk a room full of North American financial crime professionals how to\nThe gap is narrow, but the reversal is the story. The continent that produced the EU AI Act is favoring regulatory restraint; the home of Silicon Valley is showing a measurable appetite for Washington to write the rules first. That appetite has roots in both traditions, and both are now hitting their limits. The deeper question is whether AI demands a fundamentally different relationship between regulator and regulated. And if so, what that relationship looks like.\nIn 2011, U.S. federal regulators issued\nDecades of this type of regulatory stability left the U.S. financial sector with a deeply held conviction: When the next big technological shift arrives, Washington will figure it out.\nYet that long-trusted regime may now be in retreat. When regulators finally\nEurope built its regulatory reputation on a different philosophy than the U.S. Whereas the American tradition is to write rigid rules, European regulators have traditionally favored a principles- and risk-based approach — the idea that not every product or market carries the same risk, so oversight should be scaled accordingly.\nThe\nThe U.S. and Europe adopted opposite regulatory approaches to AI yet ended up in the same place. U.S. businesses trusted the rules-based playbook then discovered that regulators decided to essentially eschew generative AI regulations. The EU abandoned its flexible regulatory tradition to write a prescriptive AI rulebook, then watched as it fell behind before it even took effect.\nThe U.K.'s Financial Conduct Authority, or FCA, may be the first major regulator to say openly that the traditional approach is broken. In December, FCA Chief Executive Nikhil Rathi\nHaving worked inside the FCA, I read those remarks as a sharper signal than they may first appear. Rathi isn't proposing a refinement of the existing supervisory model. He's saying the model itself doesn't fit the technology. The old cycle of write, comply, update, repeat simply doesn't work at the speed of AI.\nThe real takeaway from the survey is that models of regulation, not just regulations themselves, need to change for AI.\nThe North American compliance leaders asking for more regulation are drawing on a rich regulatory tradition — yet one that cannot be applied to technology that reinvents itself in months. The European respondents who lean toward innovation have already experienced the pitfalls of over-specificity in a technology and regulatory greenfield.\nAn unpatched vulnerability in Anthropic's Model Context Protocol creates a channel for attackers, forcing banks to manage the third-party security risk.\nThe answer is neither an innovation-led approach nor a regulation-first model but a fundamentally different relationship between regulator and regulated, one that is continuous, adaptive and built for the speed of AI rather than the speed of legislation.\nNo major jurisdiction has fully defined what that looks like for now — the EU's AI Act was Europe's attempt to be a trailblazer in this area, but they ended up needing to backtrack on the scope of the legislation. Rathi has not indicated that the FCA is moving in that direction yet. However, I expect to see some consultations in the second half of 2026 that moves the industry toward this new model.\nFor now, the smart move is for banks to\nRathi has hit upon the honest reality: None of us truly knows how much or how quickly AI is going to develop over the coming years. That's why now is the time to test out hypotheses and engage with regulators. To quote the great technology pioneer Alan Kay: \"The best way to predict the future is to invent it.\"","image_url":"https://arizent.brightspotcdn.com/dims4/default/0e2870b/2147483647/strip/true/crop/1020x536+0+19/resize/1200x630!/quality/90/?url=https%3A%2F%2Fsource-media-brightspot.s3.us-east-1.amazonaws.com%2Ff8%2F53%2Ff64a3c9c4155b73d45655d5bfbd9%2Fusing-ai-to-battle-06082026-16x9.png","lang":"en","published_at":"2026-07-13T11:30:00+00:00","fetched_at":"2026-07-13T12:15:05+00:00","status":"read","starred":0,"extract_state":"ok","summary_auto":"- Key insight: In the U.S., bankers are used to prescriptive rulemaking, and without it they seem uncertain about how to move forward with AI. Europe tried writing prescriptive AI rules, and they were a disaster.","cluster_id":null,"extract_retries":0,"extract_error":null,"contract_version":"news_item.v1","format_contract_version":"news_item_formats.v1","dedup_url":"https://www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans","quality_profile":{"profile_version":"extraction_quality.v2","bucket":"high","confidence":0.9,"failure_kind":"none","retryable":false,"retry_after_attempts":0,"reason":"High confidence: full text extraction produced 4395 characters.","operator_guidance":{"severity":"ok","recommended_action":"trust_full_text","next_step":"Use the extracted full text as the primary article source.","operator_label":"Ready","can_retry":false,"can_use_summary":false,"diagnostics_required":false},"content_depth":{"contract_version":"content_depth.v1","category":"full_text","label":"Full text","has_full_text":true,"has_summary":true,"content_length":4395,"summary_length":212,"usable_text_length":4395,"source_field":"content"},"legacy_collapsed":false,"signals":{"extract_state":"ok","extract_error":null,"extract_retries":0,"content_length":4395,"summary_length":212}},"news_item":{"id":35407,"canonical_url":"https://www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans","source_url":"https://www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans","title":"Why do US bankers want more AI regulation than Europeans? - American Banker","source_name":"American Banker","author":null,"published_at":"2026-07-13T11:30:00+00:00","locale":"en","topic":"ai","tags":[],"rss_summary":"Why do US bankers want more AI regulation than Europeans? American Banker","full_text":"- Key insight: In the U.S., bankers are used to prescriptive rulemaking, and without it they seem uncertain about how to move forward with AI. Europe tried writing prescriptive AI rules, and they were a disaster. Now nobody knows how to move forward.\n- Expert quote: In December, the U.K.'s FCA Chief Executive Nikhil Rathi declined to create new AI-specific rules, calling AI a technology where \"the frontier is moving every three to six months.\"\n- Forward look: The answer is neither an innovation-led approach nor a regulation-first\n model but a fundamentally different relationship between regulator and regulated, one that is continuous, adaptive and built for the speed of AI rather than the speed of legislation.\nAsk a room full of North American financial crime professionals how to\nThe gap is narrow, but the reversal is the story. The continent that produced the EU AI Act is favoring regulatory restraint; the home of Silicon Valley is showing a measurable appetite for Washington to write the rules first. That appetite has roots in both traditions, and both are now hitting their limits. The deeper question is whether AI demands a fundamentally different relationship between regulator and regulated. And if so, what that relationship looks like.\nIn 2011, U.S. federal regulators issued\nDecades of this type of regulatory stability left the U.S. financial sector with a deeply held conviction: When the next big technological shift arrives, Washington will figure it out.\nYet that long-trusted regime may now be in retreat. When regulators finally\nEurope built its regulatory reputation on a different philosophy than the U.S. Whereas the American tradition is to write rigid rules, European regulators have traditionally favored a principles- and risk-based approach — the idea that not every product or market carries the same risk, so oversight should be scaled accordingly.\nThe\nThe U.S. and Europe adopted opposite regulatory approaches to AI yet ended up in the same place. U.S. businesses trusted the rules-based playbook then discovered that regulators decided to essentially eschew generative AI regulations. The EU abandoned its flexible regulatory tradition to write a prescriptive AI rulebook, then watched as it fell behind before it even took effect.\nThe U.K.'s Financial Conduct Authority, or FCA, may be the first major regulator to say openly that the traditional approach is broken. In December, FCA Chief Executive Nikhil Rathi\nHaving worked inside the FCA, I read those remarks as a sharper signal than they may first appear. Rathi isn't proposing a refinement of the existing supervisory model. He's saying the model itself doesn't fit the technology. The old cycle of write, comply, update, repeat simply doesn't work at the speed of AI.\nThe real takeaway from the survey is that models of regulation, not just regulations themselves, need to change for AI.\nThe North American compliance leaders asking for more regulation are drawing on a rich regulatory tradition — yet one that cannot be applied to technology that reinvents itself in months. The European respondents who lean toward innovation have already experienced the pitfalls of over-specificity in a technology and regulatory greenfield.\nAn unpatched vulnerability in Anthropic's Model Context Protocol creates a channel for attackers, forcing banks to manage the third-party security risk.\nThe answer is neither an innovation-led approach nor a regulation-first model but a fundamentally different relationship between regulator and regulated, one that is continuous, adaptive and built for the speed of AI rather than the speed of legislation.\nNo major jurisdiction has fully defined what that looks like for now — the EU's AI Act was Europe's attempt to be a trailblazer in this area, but they ended up needing to backtrack on the scope of the legislation. Rathi has not indicated that the FCA is moving in that direction yet. However, I expect to see some consultations in the second half of 2026 that moves the industry toward this new model.\nFor now, the smart move is for banks to\nRathi has hit upon the honest reality: None of us truly knows how much or how quickly AI is going to develop over the coming years. That's why now is the time to test out hypotheses and engage with regulators. To quote the great technology pioneer Alan Kay: \"The best way to predict the future is to invent it.\"","excerpt":"- Key insight: In the U.S., bankers are used to prescriptive rulemaking, and without it they seem uncertain about how to move forward with AI. Europe tried writing prescriptive AI rules, and they were a disaster.","extraction":{"state":"ok","confidence":0.9,"error":null,"explanation":"High confidence: full text extraction produced 4395 characters.","diagnostics_url":"/api/diagnose?url=https%3A//www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans","quality_profile":{"profile_version":"extraction_quality.v2","bucket":"high","confidence":0.9,"failure_kind":"none","retryable":false,"retry_after_attempts":0,"reason":"High confidence: full text extraction produced 4395 characters.","operator_guidance":{"severity":"ok","recommended_action":"trust_full_text","next_step":"Use the extracted full text as the primary article source.","operator_label":"Ready","can_retry":false,"can_use_summary":false,"diagnostics_required":false},"content_depth":{"contract_version":"content_depth.v1","category":"full_text","label":"Full text","has_full_text":true,"has_summary":true,"content_length":4395,"summary_length":212,"usable_text_length":4395,"source_field":"content"},"legacy_collapsed":false,"signals":{"extract_state":"ok","extract_error":null,"extract_retries":0,"content_length":4395,"summary_length":212}}},"display_formats":["compact","card","full","digest_section","json"]},"daily_stack_record":{"title":"Why do US bankers want more AI regulation than Europeans? - American Banker","url":"https://www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans","summary":"- Key insight: In the U.S., bankers are used to prescriptive rulemaking, and without it they seem uncertain about how to move forward with AI. Europe tried writing prescriptive AI rules, and they were a disaster.","source":"American Banker","date":"2026-07-13T11:30:00+00:00","content":"- Key insight: In the U.S., bankers are used to prescriptive rulemaking, and without it they seem uncertain about how to move forward with AI. Europe tried writing prescriptive AI rules, and they were a disaster. Now nobody knows how to move forward.\n- Expert quote: In December, the U.K.'s FCA Chief Executive Nikhil Rathi declined to create new AI-specific rules, calling AI a technology where \"the frontier is moving every three to six months.\"\n- Forward look: The answer is neither an innovation-led approach nor a regulation-first\n model but a fundamentally different relationship between regulator and regulated, one that is continuous, adaptive and built for the speed of AI rather than the speed of legislation.\nAsk a room full of North American financial crime professionals how to\nThe gap is narrow, but the reversal is the story. The continent that produced the EU AI Act is favoring regulatory restraint; the home of Silicon Valley is showing a measurable appetite for Washington to write the rules first. That appetite has roots in both traditions, and both are now hitting their limits. The deeper question is whether AI demands a fundamentally different relationship between regulator and regulated. And if so, what that relationship looks like.\nIn 2011, U.S. federal regulators issued\nDecades of this type of regulatory stability left the U.S. financial sector with a deeply held conviction: When the next big technological shift arrives, Washington will figure it out.\nYet that long-trusted regime may now be in retreat. When regulators finally\nEurope built its regulatory reputation on a different philosophy than the U.S. Whereas the American tradition is to write rigid rules, European regulators have traditionally favored a principles- and risk-based approach — the idea that not every product or market carries the same risk, so oversight should be scaled accordingly.\nThe\nThe U.S. and Europe adopted opposite regulatory approaches to AI yet ended up in the same place. U.S. businesses trusted the rules-based playbook then discovered that regulators decided to essentially eschew generative AI regulations. The EU abandoned its flexible regulatory tradition to write a prescriptive AI rulebook, then watched as it fell behind before it even took effect.\nThe U.K.'s Financial Conduct Authority, or FCA, may be the first major regulator to say openly that the traditional approach is broken. In December, FCA Chief Executive Nikhil Rathi\nHaving worked inside the FCA, I read those remarks as a sharper signal than they may first appear. Rathi isn't proposing a refinement of the existing supervisory model. He's saying the model itself doesn't fit the technology. The old cycle of write, comply, update, repeat simply doesn't work at the speed of AI.\nThe real takeaway from the survey is that models of regulation, not just regulations themselves, need to change for AI.\nThe North American compliance leaders asking for more regulation are drawing on a rich regulatory tradition — yet one that cannot be applied to technology that reinvents itself in months. The European respondents who lean toward innovation have already experienced the pitfalls of over-specificity in a technology and regulatory greenfield.\nAn unpatched vulnerability in Anthropic's Model Context Protocol creates a channel for attackers, forcing banks to manage the third-party security risk.\nThe answer is neither an innovation-led approach nor a regulation-first model but a fundamentally different relationship between regulator and regulated, one that is continuous, adaptive and built for the speed of AI rather than the speed of legislation.\nNo major jurisdiction has fully defined what that looks like for now — the EU's AI Act was Europe's attempt to be a trailblazer in this area, but they ended up needing to backtrack on the scope of the legislation. Rathi has not indicated that the FCA is moving in that direction yet. However, I expect to see some consultations in the second half of 2026 that moves the industry toward this new model.\nFor now, the smart move is for banks to\nRathi has hit upon the honest reality: None of us truly knows how much or how quickly AI is going to develop over the coming years. That's why now is the time to test out hypotheses and engage with regulators. To quote the great technology pioneer Alan Kay: \"The best way to predict the future is to invent it.\"","confidence":0.9,"diagnostics_url":"/api/diagnose?url=https%3A//www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans","quality_bucket":"high","failure_kind":"none","retryable":false,"quality_reason":"High confidence: full text extraction produced 4395 characters.","quality_profile":{"profile_version":"extraction_quality.v2","bucket":"high","confidence":0.9,"failure_kind":"none","retryable":false,"retry_after_attempts":0,"reason":"High confidence: full text extraction produced 4395 characters.","operator_guidance":{"severity":"ok","recommended_action":"trust_full_text","next_step":"Use the extracted full text as the primary article source.","operator_label":"Ready","can_retry":false,"can_use_summary":false,"diagnostics_required":false},"content_depth":{"contract_version":"content_depth.v1","category":"full_text","label":"Full text","has_full_text":true,"has_summary":true,"content_length":4395,"summary_length":212,"usable_text_length":4395,"source_field":"content"},"legacy_collapsed":false,"signals":{"extract_state":"ok","extract_error":null,"extract_retries":0,"content_length":4395,"summary_length":212}},"tags":[]},"fallback_formats":["markdown","json","html"],"actions":{"read":"/item/35407","export_markdown":"/api/items/35407/export?format=markdown","export_json":"/api/items/35407/export?format=json","diagnose":"/api/diagnose?url=https%3A//www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans"},"formats":{"full":{"id":35407,"title":"Why do US bankers want more AI regulation than Europeans? - American Banker","url":"https://www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans","source":"American Banker","author":null,"published_at":"2026-07-13T11:30:00+00:00","locale":"en","topic":"ai","tags":[],"excerpt":"- Key insight: In the U.S., bankers are used to prescriptive rulemaking, and without it they seem uncertain about how to move forward with AI. Europe tried writing prescriptive AI rules, and they were a disaster.","full_text":"- Key insight: In the U.S., bankers are used to prescriptive rulemaking, and without it they seem uncertain about how to move forward with AI. Europe tried writing prescriptive AI rules, and they were a disaster. Now nobody knows how to move forward.\n- Expert quote: In December, the U.K.'s FCA Chief Executive Nikhil Rathi declined to create new AI-specific rules, calling AI a technology where \"the frontier is moving every three to six months.\"\n- Forward look: The answer is neither an innovation-led approach nor a regulation-first\n model but a fundamentally different relationship between regulator and regulated, one that is continuous, adaptive and built for the speed of AI rather than the speed of legislation.\nAsk a room full of North American financial crime professionals how to\nThe gap is narrow, but the reversal is the story. The continent that produced the EU AI Act is favoring regulatory restraint; the home of Silicon Valley is showing a measurable appetite for Washington to write the rules first. That appetite has roots in both traditions, and both are now hitting their limits. The deeper question is whether AI demands a fundamentally different relationship between regulator and regulated. And if so, what that relationship looks like.\nIn 2011, U.S. federal regulators issued\nDecades of this type of regulatory stability left the U.S. financial sector with a deeply held conviction: When the next big technological shift arrives, Washington will figure it out.\nYet that long-trusted regime may now be in retreat. When regulators finally\nEurope built its regulatory reputation on a different philosophy than the U.S. Whereas the American tradition is to write rigid rules, European regulators have traditionally favored a principles- and risk-based approach — the idea that not every product or market carries the same risk, so oversight should be scaled accordingly.\nThe\nThe U.S. and Europe adopted opposite regulatory approaches to AI yet ended up in the same place. U.S. businesses trusted the rules-based playbook then discovered that regulators decided to essentially eschew generative AI regulations. The EU abandoned its flexible regulatory tradition to write a prescriptive AI rulebook, then watched as it fell behind before it even took effect.\nThe U.K.'s Financial Conduct Authority, or FCA, may be the first major regulator to say openly that the traditional approach is broken. In December, FCA Chief Executive Nikhil Rathi\nHaving worked inside the FCA, I read those remarks as a sharper signal than they may first appear. Rathi isn't proposing a refinement of the existing supervisory model. He's saying the model itself doesn't fit the technology. The old cycle of write, comply, update, repeat simply doesn't work at the speed of AI.\nThe real takeaway from the survey is that models of regulation, not just regulations themselves, need to change for AI.\nThe North American compliance leaders asking for more regulation are drawing on a rich regulatory tradition — yet one that cannot be applied to technology that reinvents itself in months. The European respondents who lean toward innovation have already experienced the pitfalls of over-specificity in a technology and regulatory greenfield.\nAn unpatched vulnerability in Anthropic's Model Context Protocol creates a channel for attackers, forcing banks to manage the third-party security risk.\nThe answer is neither an innovation-led approach nor a regulation-first model but a fundamentally different relationship between regulator and regulated, one that is continuous, adaptive and built for the speed of AI rather than the speed of legislation.\nNo major jurisdiction has fully defined what that looks like for now — the EU's AI Act was Europe's attempt to be a trailblazer in this area, but they ended up needing to backtrack on the scope of the legislation. Rathi has not indicated that the FCA is moving in that direction yet. However, I expect to see some consultations in the second half of 2026 that moves the industry toward this new model.\nFor now, the smart move is for banks to\nRathi has hit upon the honest reality: None of us truly knows how much or how quickly AI is going to develop over the coming years. That's why now is the time to test out hypotheses and engage with regulators. To quote the great technology pioneer Alan Kay: \"The best way to predict the future is to invent it.\"","reading_time_min":4,"extraction":{"state":"ok","confidence":0.9,"error":null,"explanation":"High confidence: full text extraction produced 4395 characters.","diagnostics_url":"/api/diagnose?url=https%3A//www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans","quality_profile":{"profile_version":"extraction_quality.v2","bucket":"high","confidence":0.9,"failure_kind":"none","retryable":false,"retry_after_attempts":0,"reason":"High confidence: full text extraction produced 4395 characters.","operator_guidance":{"severity":"ok","recommended_action":"trust_full_text","next_step":"Use the extracted full text as the primary article source.","operator_label":"Ready","can_retry":false,"can_use_summary":false,"diagnostics_required":false},"content_depth":{"contract_version":"content_depth.v1","category":"full_text","label":"Full text","has_full_text":true,"has_summary":true,"content_length":4395,"summary_length":212,"usable_text_length":4395,"source_field":"content"},"legacy_collapsed":false,"signals":{"extract_state":"ok","extract_error":null,"extract_retries":0,"content_length":4395,"summary_length":212}}},"quality_profile":{"profile_version":"extraction_quality.v2","bucket":"high","confidence":0.9,"failure_kind":"none","retryable":false,"retry_after_attempts":0,"reason":"High confidence: full text extraction produced 4395 characters.","operator_guidance":{"severity":"ok","recommended_action":"trust_full_text","next_step":"Use the extracted full text as the primary article source.","operator_label":"Ready","can_retry":false,"can_use_summary":false,"diagnostics_required":false},"content_depth":{"contract_version":"content_depth.v1","category":"full_text","label":"Full text","has_full_text":true,"has_summary":true,"content_length":4395,"summary_length":212,"usable_text_length":4395,"source_field":"content"},"legacy_collapsed":false,"signals":{"extract_state":"ok","extract_error":null,"extract_retries":0,"content_length":4395,"summary_length":212}},"actions":{"read":"/item/35407","export_markdown":"/api/items/35407/export?format=markdown","export_json":"/api/items/35407/export?format=json","diagnose":"/api/diagnose?url=https%3A//www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans"}},"digest":{"id":35407,"title":"Why do US bankers want more AI regulation than Europeans? - American Banker","url":"https://www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans","source":"American Banker","topic":"ai","published_at":"2026-07-13T11:30:00+00:00","excerpt":"- Key insight: In the U.S., bankers are used to prescriptive rulemaking, and without it they seem uncertain about how to move forward with AI. Europe tried writing prescriptive AI rules, and they were a disaster.","quality_bucket":"high","quality_reason":"High confidence: full text extraction produced 4395 characters.","reading_time_min":4,"cluster_id":null},"card":{"display_title":"Why do US bankers want more AI regulation than Europeans? - American Banker","subtitle":"American Banker · 2026-07-13","summary":"- Key insight: In the U.S., bankers are used to prescriptive rulemaking, and without it they seem uncertain about how to move forward with AI. Europe tried writing prescriptive AI rules, and they were a disaster.","badges":["quality:high"],"links":{"read":"/item/35407","original":"https://www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans","diagnose":"/api/diagnose?url=https%3A//www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans"},"quality_warning":null},"export":{"title":"Why do US bankers want more AI regulation than Europeans? - American Banker","url":"https://www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans","summary":"- Key insight: In the U.S., bankers are used to prescriptive rulemaking, and without it they seem uncertain about how to move forward with AI. Europe tried writing prescriptive AI rules, and they were a disaster.","source":"American Banker","date":"2026-07-13T11:30:00+00:00","content":"- Key insight: In the U.S., bankers are used to prescriptive rulemaking, and without it they seem uncertain about how to move forward with AI. Europe tried writing prescriptive AI rules, and they were a disaster. Now nobody knows how to move forward.\n- Expert quote: In December, the U.K.'s FCA Chief Executive Nikhil Rathi declined to create new AI-specific rules, calling AI a technology where \"the frontier is moving every three to six months.\"\n- Forward look: The answer is neither an innovation-led approach nor a regulation-first\n model but a fundamentally different relationship between regulator and regulated, one that is continuous, adaptive and built for the speed of AI rather than the speed of legislation.\nAsk a room full of North American financial crime professionals how to\nThe gap is narrow, but the reversal is the story. The continent that produced the EU AI Act is favoring regulatory restraint; the home of Silicon Valley is showing a measurable appetite for Washington to write the rules first. That appetite has roots in both traditions, and both are now hitting their limits. The deeper question is whether AI demands a fundamentally different relationship between regulator and regulated. And if so, what that relationship looks like.\nIn 2011, U.S. federal regulators issued\nDecades of this type of regulatory stability left the U.S. financial sector with a deeply held conviction: When the next big technological shift arrives, Washington will figure it out.\nYet that long-trusted regime may now be in retreat. When regulators finally\nEurope built its regulatory reputation on a different philosophy than the U.S. Whereas the American tradition is to write rigid rules, European regulators have traditionally favored a principles- and risk-based approach — the idea that not every product or market carries the same risk, so oversight should be scaled accordingly.\nThe\nThe U.S. and Europe adopted opposite regulatory approaches to AI yet ended up in the same place. U.S. businesses trusted the rules-based playbook then discovered that regulators decided to essentially eschew generative AI regulations. The EU abandoned its flexible regulatory tradition to write a prescriptive AI rulebook, then watched as it fell behind before it even took effect.\nThe U.K.'s Financial Conduct Authority, or FCA, may be the first major regulator to say openly that the traditional approach is broken. In December, FCA Chief Executive Nikhil Rathi\nHaving worked inside the FCA, I read those remarks as a sharper signal than they may first appear. Rathi isn't proposing a refinement of the existing supervisory model. He's saying the model itself doesn't fit the technology. The old cycle of write, comply, update, repeat simply doesn't work at the speed of AI.\nThe real takeaway from the survey is that models of regulation, not just regulations themselves, need to change for AI.\nThe North American compliance leaders asking for more regulation are drawing on a rich regulatory tradition — yet one that cannot be applied to technology that reinvents itself in months. The European respondents who lean toward innovation have already experienced the pitfalls of over-specificity in a technology and regulatory greenfield.\nAn unpatched vulnerability in Anthropic's Model Context Protocol creates a channel for attackers, forcing banks to manage the third-party security risk.\nThe answer is neither an innovation-led approach nor a regulation-first model but a fundamentally different relationship between regulator and regulated, one that is continuous, adaptive and built for the speed of AI rather than the speed of legislation.\nNo major jurisdiction has fully defined what that looks like for now — the EU's AI Act was Europe's attempt to be a trailblazer in this area, but they ended up needing to backtrack on the scope of the legislation. Rathi has not indicated that the FCA is moving in that direction yet. However, I expect to see some consultations in the second half of 2026 that moves the industry toward this new model.\nFor now, the smart move is for banks to\nRathi has hit upon the honest reality: None of us truly knows how much or how quickly AI is going to develop over the coming years. That's why now is the time to test out hypotheses and engage with regulators. To quote the great technology pioneer Alan Kay: \"The best way to predict the future is to invent it.\"","confidence":0.9,"diagnostics_url":"/api/diagnose?url=https%3A//www.americanbanker.com/opinion/why-do-us-bankers-want-more-ai-regulation-than-europeans","quality_bucket":"high","failure_kind":"none","retryable":false,"quality_reason":"High confidence: full text extraction produced 4395 characters.","quality_profile":{"profile_version":"extraction_quality.v2","bucket":"high","confidence":0.9,"failure_kind":"none","retryable":false,"retry_after_attempts":0,"reason":"High confidence: full text extraction produced 4395 characters.","operator_guidance":{"severity":"ok","recommended_action":"trust_full_text","next_step":"Use the extracted full text as the primary article source.","operator_label":"Ready","can_retry":false,"can_use_summary":false,"diagnostics_required":false},"content_depth":{"contract_version":"content_depth.v1","category":"full_text","label":"Full text","has_full_text":true,"has_summary":true,"content_length":4395,"summary_length":212,"usable_text_length":4395,"source_field":"content"},"legacy_collapsed":false,"signals":{"extract_state":"ok","extract_error":null,"extract_retries":0,"content_length":4395,"summary_length":212}},"tags":[],"format_contract_version":"news_item_formats.v1"}}}