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He said the Bank's Financial Policy Committee would take a look at AI and machine learning next year to consider their risks to financial stability, working alongside other authorities.

AI and machine learning could deliver significant benefits to the financial sector by driving greater operational efficiency, improving risk management and providing new products and services, the committee said.

But wider adoption could post system-wide risks, such as amplifying herd behaviour or increasing the risk of cyber attacks, it added.

BoE Governor Andrew Bailey said everyone was learning at a fast pace about AI, and should approach it with "eyes wide open".

"It has, I think quite profound implications, potentially for economic growth and how economies are shaped going forward," Bailey said.

Firms using AI need to understand exactly how it worked, he added.

Woods said the BoE could consider what steps senior managers in the financial sector, who are directly accountable to regulators, should take to assure themselves that "what's coming out of the black box is actually reasonable".

The BoE has just been given new powers to oversee how banks use third parties, such as cloud providers, for critical services.

"So if it became the case the financial system became significantly dependent on a provider of AI technology, it might well be that that will be a candidate for the use of those new powers," Woods said.

-- Israel’s Securities Authority said it found no significant stock-trading abnormalities in the days preceding Hamas’s Oct. 7 attack that warrant further investigation, responding to claims in a US-authored research paper that had caused a public uproar.

Tel Aviv Stock Exchange Chief Executive Officer Ittai Ben-Zeev added there were also no oddities evident in equity, bond, or derivative trading, according to an interview Wednesday with Bloomberg TV.

The “local market didn’t see anything that’s awkward,” he said.

The securities regulator, known as ISA, opened an investigation into possible suspicious pre-attack trading not long after the deadly incursion took place, it said in a statement Tuesday.

It then re-examined those findings following the publication of a research report on Dec. 4 titled “Trading on Terror,” written by Robert J. Jackson, at New York University School of Law, and Joshua Mitts, at Columbia Law School.

Protests, War Push Israel Tech Deals to 10-Year Low, PwC Says The US-based researchers said they found a “significant spike in short selling in the principal Israeli-company ETF days before the Oct. 7 Hamas attack,” referring to exchange-traded funds popular with investors seeking exposure to a specific region, country or industry.

“Our findings suggest that traders informed about the coming attacks profited from these tragic events,” they wrote.

Domestic Only ISA said it’s only responsible for overseeing trading occurring in the country, and therefore its lack of findings “reflect only trading activity in Israel.” It didn’t comment on trading of Israeli securities abroad, which could include US-listed ETFs.

The US authors also said they found a substantial overall increase in short-selling interest in the Tel Aviv Stock Exchange, peaking just before the attack.

“For one company alone, Bank Leumi Le-Israel, 4.43 million new shares sold short over the Sept. 14 to Oct. 5 period, yielding profits of 3.2 billion shekels ($863 million) on that additional short selling,” the said.

Stocks Rebound Israel’s TA-35 stock index dropped 6.5% on Oct. 9, the first trading day after the attack, but has since rebounded to close 1.3% lower as of Tuesday compared with Oct. 5.

Ben-Zeev told Bloomberg TV that international investors have been returning to the Tel Aviv equity market in the past couple of weeks after pulling out money at the start of the war with Hamas.

“Investors acknowledge that the market is very cheap and they’re used to these types of situations,” he said.

The pound hit its strongest against the euro in three months on Wednesday, as signs of economic weakness in the euro zone and market expectations that rate cuts will come earlier next year in Europe than Britain weighed on the common currency.

The euro dipped as much as 0.22% against the pound to 85.54 pence, its lowest since early September, before recovering a touch to trade broadly flat on the day.

The pound was also steady against the dollar at $1.2603, just about keeping in sight of last week's near four month high of $1.2733.

"Bank of England policy makers have been pretty consistent in saying the labour market is too tight and it's too early to consider talking about interest rate cuts, and inflation is a bit higher in the UK than in the euro zone or the U.S.," said Jane Foley, head of FX strategy at Rabobank.

As a result "the market is thinking that the ECB could be cutting rates first, then the Fed and then the BoE." BoE governor Andrew Bailey said on Wednesday that interest rates in Britain will need to stay at current levels for some time and the Bank is vigilant to financial stability risks that might arise from that.

On top of that, said Foley, recent economic weakness at the heart of Europe could hurt the common currency.

German industrial orders fell unexpectedly in October, declining by 3.7% on the previous month on a seasonally and calendar-adjusted basis, the federal statistics office said on Wednesday.

"If you can be reassured that the inflationary problem is going to be under control in Europe, a weak currency could actually be quite favourable to help with the European Commission's rush to improve the competitiveness of the region," she said.

The pound's moves against the dollar have largely been driven by fluctuations in the greenback.

On Wednesday, traders were waiting for the ADP National Employment Report of private U.S. payrolls, ahead of Friday's crucial jobs data.

-- Some Dell Technologies Inc. investors are questioning whether the stock’s price tag justifies growth that hasn’t materialized yet.

The personal computer maker’s shares soared nearly 90% to a record through the end of November, amid expectations of a boost from artificial intelligence demand.

The stock, which is trading above its five-year average at about 10 times forward earnings, has faltered since Dell’s third quarter report showed the AI boost is far off.

“The stock had run up significantly and we are taking a patient approach when it comes to the AI growth opportunity.” Dell shares rose slightly at market open Wednesday.

Dell sparked optimism in August when it beat sales expectations in the second quarter and said it saw demand for servers that support AI workloads to be a long-term tailwind.

It’s a scenario analysts like Morningstar’s William Kerwin have been warning of.

The stock has picked up three-sell equivalent ratings since August.

Kerwin, who cut his rating on Dell to sell in September, says shares are overvalued at current levels.

Barclays analysts led by Tim Long also downgraded shares of the company to a sell-equivalent rating in September, citing macroeconomic pressures leading to difficulty in the PC and server/storage end markets that AI likely wouldn’t be able to offset.

“Everyone seems convinced that the bottom of the PC cycle is here, and there are some positives in that, but the real growth won’t come until AI-based PCs and phones come out.” Dell Sales Miss Estimates With Corporate PCs Still Lagging That may not happen until the latter half of 2024, Newman added.

Consensus estimates now expect Dell’s revenue in the fiscal first quarter of 2025 to slip further to about $21 billion before rebounding to nearly $23 billion in the second quarter and growing through the end of the year.

Still, Wall Street remains bullish on Dell overall.

More than 70% of those covering the company have a buy-equivalent rating, and the average $79 price target implies more than 13% upside, according to data compiled by Bloomberg.

Its gain of around 70% this year is “a sign that Dell is still seen as relevant,” said Peter Garnry, head of equity strategy at Saxo Bank AS.

“The company is in the same position as Oracle years back with a stable and high margin business but no growth.” For some investors, Dell’s solid financial position leaves it well placed to withstand a slowdown before potentially benefiting from the next wave of artificial intelligence demand.

“We like companies that have a very sterling balance sheet, don’t borrow very much and aren’t as subject to the vicissitudes of the market and the economy,” said Jack Ablin, chief investment officer of Cresset Capital LLC.

“AI could be the next catalyst to drive the next hardware cycle.” Tech Chart of the Day Apple Inc. shares rose Wednesday, with the iPhone maker closing with a $3 trillion market capitalization for the first time since August.

The stock gained following a strong forecast from iPhone assembler Hon Hai Precision Industry Co. Technology stocks have rebounded in recent weeks amid hopes that interest rates have peaked.

--With assistance from Ryan Vlastelica and Subrat Patnaik.

Exxon Mobil on Wednesday forecast production of 3.8 million barrels of oil equivalent per day (boepd) in 2024, as the top U.S. oil producer bets on a lift from Permian basin and Guyana.

The company said it would increase the pace of share repurchases to $20 billion per year from the closing of its Pioneer deal through 2025.

Exxon said it expects $6 billion in additional cost savings by 2027.

The company has said it expected output to be flat until the end of this year, at 3.7 million boepd, due to its exit from Russia.

Exxon Mobil will target annual project spending of between $22 billion and $27 billion through 2027, the oil major said in an update on Wednesday that largely continues existing spending and production goals.

The largest U.S. oil producer laid out plans to boost spending on nascent lithium and low carbon businesses by 18% throughout 2027.

Its presentation, however, left out details of projected gains from the $60 billion acquisition of Pioneer Natural Resources that is expected be completed in the first half of 2024, and shares fell by more than 1% in morning trading.

Company executives also said most profits from its push into energy transition businesses including carbon dioxide abatement and storage and lithium production would come after 2027.

Profits from those units also will depend on government help through regulations and infrastructure.

"All those things are coming together," said CEO Darren Woods.

"But until they ultimately land, and we know what we've got" the outlook will remain "less certain." "Exxon will need to convince investors on the merits of the low-carbon spending from here," said Biraj Borkhataria, an equity analyst at RBC Capital in a note.

The annual forecast is watched closely by investors for its spending and production targets.

This year's outlook was keenly anticipated because of deals for Pioneer and carbon pipeline firm Denbury, both of which will underpin long-range targets.

Exxon announced plans to buy Pioneer in October for nearly $60 billion in an all-stock deal, saying it plans to more than triple its production in the top U.S. shale field to 2 million barrels per day (bpd) by 2027.

Denbury was a $4.9 billion acquisition to buttress its carbon business.

Exxon's estimated production growth for next year excludes about 700,000 barrels per day (bpd) it would gain from the Pioneer acquisition.

That deal would double Exxon's Permian shale oil and gas output to more than 1.3 million bpd, the company has said.

GOVERNMENT SUPPORT Exxon's spending outlook will raise outlays for its energy transition unit, called Low Carbon Solutions, to $20 billion between 2022 and 2027, from $17 billion.

"We need technology-neutral durable policy support, transparent carbon pricing and accounting, and ultimately, customer commitments to support increased investment," Woods said.

Exxon will increase its share buybacks to $20 billion annually through 2025, from $17.5 billion currently, after the Pioneer merger closes, the company said.

An ongoing divestment plan for its refining operations also will continue.

Analysts said excluding any contributions from the Pioneer deal, the company's oil and gas targets were below expectations and its spending forecast higher than expected.

Annual project expenditures could hit $32 billion by 2027, above market expectations, assuming an incremental $4-5 billion in spending on Pioneer's assets, RBC Capital said.

Exxon projected earnings and cash flow to rise through 2027 by $14 billion on a combination of cost cutting, higher oil output from Guyana and U.S. shale and gains in its refining and chemicals business.

The company is forecast to earn $37.2 billion this year, according to financial firm LSEG.

Increase cash flow will come from higher earnings and a new $6 billion cost reduction target through the end of 2027.

The company slashed project spending and overhead after suffering a historic $22 billion annual loss in 2020.

SHALE, GUYANA OIL GAINS Exxon forecasts production of 3.8 million barrels of oil equivalent per day (boepd) in 2024, from 3.7 million this year, as it bets on a lift from the Permian shale basin and Guyana.

Spending on new projects will expand to between $23 billion and $25 billion next year, with a range that has a mid-point spending of $24.5 billion annually from 2025 through 2027.

Exxon Mobil on Wednesday forecast production of 3.8 million barrels of oil equivalent per day (boepd) through 2027, as the top U.S. oil producer bets on a lift from Permian basin and Guyana.

The company has said it expected output to be flat until the end of this year, at 3.7 million boepd, due to its withdrawal from Russia.

The top bosses of JPMorgan, Morgan Stanley, Goldman Sachs and other major banks warned lawmakers Wednesday that capital hikes and other new regulations being contemplated by U.S. bank regulators will hurt lending, capital markets and the broader economy.

The industry has been waging a fierce campaign to kill the "Basel endgame" proposal, which overhauls how banks must calculate their loss-absorbing capital, and as regulators roll out fair lending and fee cap regulations, among other rules.

The CEOs hope to use the hearing as an opportunity to try to convince key moderate Democratic senators that the Basel rule, which is being led by the Federal Reserve, could stifle lending, hurting small businesses and consumers.

It quickly became a battle of narratives, with many Democrats casting skepticism on the industry's complaints and accusing them of over-emphasizing the risks, while Republicans and the CEOs stressed the potential adverse impact on a range of products and services, from green lending, commodities hedging, and pension plan profits, to U.S. Treasury market liquidity.

"If enacted as drafted, this proposal will fundamentally alter the U.S. economy in ways that the Federal Reserve has not studied or contemplated," Dimon, CEO of the country's largest lender JPMorgan, said in his prepared testimony.

"A lot of loans become unprofitable," Dimon said later, citing solar, wind, middle market and community lending.

The other CEOs appearing are: Bank of America's Brian Moynihan, Wells Fargo's Charles Scharf, Goldman Sachs' David Solomon, Morgan Stanley's James Gorman, State Street's Ronald O'Hanley, and BNY Mellon's Robin Vince.

Gorman emphatically criticized Basel as "wholly unnecessary" and later making "no sense" for an industry already awash in cash and subject to a slew of strict regulations.

Senator Sherrod Brown, the Ohio Democrat who chairs the Committee, quickly criticized the banks for aggressively lobbying against the rules, including with multiple public advertising campaigns and meetings with lawmakers.

When pressed by Brown as to whether all the banks could meet the extra capital required by Basel, all eight indicated they could.

"Absolutely nothing in these rules would stop your banks from making loans to working families," he said.

"What your banks want is to maximize quarterly profits, the cost of everything and everyone else be damned," Brown told the CEOs.

Regulators say new rules, including capital hikes, are necessary to protect the banking system from unforeseen shocks, especially following the collapse of Silicon Valley Bank and two other lenders earlier this year.

The Wall Street bosses enjoyed support from some of the Committee's Republicans who generally oppose tight regulations.

Senator Tim Scott, the panel's top Republican, echoed bank concerns, saying the proposed rules could have a "devastating impact" on small businesses.

Senator Mike Rounds, a Republican from South Dakota, asked the CEOs if the regulations could hurt homebuyers, farmers, small business owners, prompting all eight to raise their hands.

Big bank CEOs have been appearing before Congress for several years after the 2007-09 financial crisis and subsequent scandals thrust the industry into Washington's crosshairs.

While they rarely result in legislation, hearings have led banks to make changes.