Fed reports big banks hold nearly $1 trillion in AI exposure amid boom risk

The Federal Reserve's November Financial Stability Report shows the largest US bank holding companies hold close to $1 trillion in exposure to firms driving the AI buildout. The Fed still calls the banking system sound with high capital ratios, but 87% of market contacts surveyed by the New York Fed flagged related concerns. Traders should watch this concentration because an AI-driven credit shock could hit bank balance sheets and spill into risk assets, including crypto.