AI-Driven Economic Downturn Looms, Warns Bank of England Governor
Andrew Bailey, governor of the Bank of England and chairman of the Financial Stability Board international watchdog, has warned G20 finance ministers that artificial intelligence could cause a global economic downturn.
In an open letter to US finance ministers on Monday, Bailey highlighted the risk of a 'future market correction' caused by the collapse of growth in the AI sector. This, he said, could spread worldwide and pose significant cyber security risks to financial systems.
The Bank of England governor expressed concern about the increasing concentration of money into a small number of major technology companies, as well as high valuations and increased borrowing by investors. These factors, Bailey noted, 'could amplify any future market correction'.
He also called on those in charge of financial security to develop 'appropriate steps to support safe and responsible model release and deployment on a global basis'. This warning comes amid growing concerns about the volatility caused by energy supply shocks prompted by the US-Iran war.