AI Puts Global Financial Stability at Risk, Warns Bank of England Governor

Bank of England Governor Andrew Bailey has warned that AI poses a threat to the stability of the global financial system. In a letter to G20 finance ministers, Bailey highlighted the risks associated with frontier AI models and their potential impact on cyber risk.

According to Bailey, these powerful models can alter the speed, scale, and economics of cyber risk, which could undermine market confidence system-wide.

The Bank of England chief noted that the rising interconnectedness of markets has increased the risk of disruptions broadly. He also flagged vulnerabilities in areas like private credit and leveraged ETFs as potential flashpoints for a disruptive event.

Bailey's warning comes as the risk of a rogue AI is no longer theoretical, with recent incidents such as the breach of Hugging Face's systems by an autonomous OpenAI agent.