ECB’s Panetta Warns AI Optimism Leaves Markets Vulnerable to Sharp Correction

Panetta's framing is notable because it comes from a central banker rather than a market participant: the same optimism that lets AI firms raise capital cheaply is what makes the repricing risk systemic rather than sector-specific. The warning lands on European policymakers who would inherit the fallout from a US-led tech correction, and it implicitly questions whether current capital flows into AI infrastructure are self-reinforcing or self-undermining. Whether other ECB officials echo this, or treat it as a lone caution, is the signal to watch.