A compliance analyst asks which of the 10 CPMI API harmonisation recommendations specifically target commercial banks or correspondent banking institutions, which target payment system operators, which target central banks or regulators, and which target standards bodies—seeking a recommendation-by-recommendation stakeholder breakdown.
With no retrievable per-recommendation content, the model inferred stakeholder assignments from the recommendation category names and its knowledge of how standards-body governance typically works — BIAN, ISO, and SWIFT appear as plausible assignments to a harmonisation-processes category without any retrieved basis. The model presented this inference as a stakeholder breakdown, not as a reasoned extrapolation from category names.
Domain inference used as a stakeholder-assignment mechanism — assigning ISO, BIAN, and SWIFT to a harmonisation-processes category by structural reasoning — is not retrieval. The training data for this document appears to lack per-recommendation content, and the model's self-check did not flag that its output was constructed rather than retrieved. The RAG glue layer is not enforcing a 'content was found' gate before allowing domain-inference fill.
When asked to map which of the 10 CPMI API harmonisation recommendations target commercial banks versus payment system operators versus standards bodies, an AI tool produced a confident category-level breakdown — assigning specific recommendation groupings to specific stakeholder types — that goes beyond what any accessible source supports. When challenged, the AI acknowledged it could not verify the assignments.
For Legal teams at Retail Banking firms, this failure is acutely dangerous at the product-scoping stage: a recommendation incorrectly assigned as targeting only standards bodies or central banks, rather than commercial banks, could lead Legal to advise that a particular obligation does not apply to the firm. That misjudgement feeds into product launch approvals, third-party API contracting terms, and compliance scope determinations — all of which are difficult and costly to unwind once embedded in governance decisions.
Each finding has a stable Citation ID (RLB-F-… for aggregated case-study findings, RLB-H-… for raw per-model hallucinations) — like a DOI, the ID always resolves to the canonical finding even if URLs change.
RegLeg Specialist Panel (2026). "Finding#2 — Fabricated recommendation-level stakeholder breakdown — Retail Banking × Legal — International / Multilateral." Citation ID: RLB-F-INT-BIS-CPMI-API-HARMONISATION-CROSS-BORDER-2024-Q008. RegLegBrief AI Hallucination Research, published 2026-06-04. https://reglegbrief.com/regulators/j1/int/bis-cpmi/cpmi-api-harmonisation-cross-border-2024/sectors/retail_banking/legal/finding/INT-BIS-CPMI-INT-001-CPMI-API-HARMONISATION-CROSS-BORDER-2024-v1-008/
RegLeg Specialist Panel. (2026). Finding#2 — Fabricated recommendation-level stakeholder breakdown [Hallucination finding RLB-F-INT-BIS-CPMI-API-HARMONISATION-CROSS-BORDER-2024-Q008]. RegLegBrief AI Hallucination Research. https://reglegbrief.com/regulators/j1/int/bis-cpmi/cpmi-api-harmonisation-cross-border-2024/sectors/retail_banking/legal/finding/INT-BIS-CPMI-INT-001-CPMI-API-HARMONISATION-CROSS-BORDER-2024-v1-008/
RegLeg Specialist Panel, Finding#2 — Fabricated recommendation-level stakeholder breakdown [RLB-F-INT-BIS-CPMI-API-HARMONISATION-CROSS-BORDER-2024-Q008], RegLegBrief AI Hallucination Research (June 04, 2026), https://reglegbrief.com/regulators/j1/int/bis-cpmi/cpmi-api-harmonisation-cross-border-2024/sectors/retail_banking/legal/finding/INT-BIS-CPMI-INT-001-CPMI-API-HARMONISATION-CROSS-BORDER-2024-v1-008/.
@misc{reglegbrief_RLB_F_INT_BIS_CPMI_API_HARMONISATION_CROSS_BORDER_2024_Q008,
author = {RegLeg Specialist Panel},
title = {Finding#2 — Fabricated recommendation-level stakeholder breakdown},
year = {2026},
publisher = {RegLegBrief AI Hallucination Research},
note = {Hallucination finding Citation ID: RLB-F-INT-BIS-CPMI-API-HARMONISATION-CROSS-BORDER-2024-Q008},
url = {https://reglegbrief.com/regulators/j1/int/bis-cpmi/cpmi-api-harmonisation-cross-border-2024/sectors/retail_banking/legal/finding/INT-BIS-CPMI-INT-001-CPMI-API-HARMONISATION-CROSS-BORDER-2024-v1-008/}
}