Bailey Sounds Alarm on Advanced AI Threats to Global Financial Stability

Andrew Bailey, Governor of the Bank of England, has sounded the alarm on advanced artificial intelligence (AI) posing a threat to global financial stability. In a letter addressed to finance ministers and central bank governors ahead of their meeting in North Carolina this week, Bailey warned that 'frontier' AI models have increasingly sophisticated autonomy and problem-solving capabilities, as well as threat capabilities.

These advanced AI models could destabilize the highly interconnected global financial system through cyber disruptions, which could spread across jurisdictions. Bailey emphasized that many jurisdictions lack protocols to manage the development, release, and deployment of these advanced frontier AI models, heightening risks for the financial sector and beyond.

The Bank of England governor called for international cooperation to tackle growing AI threats, noting that no country can isolate itself from today's cross-border systems. He also highlighted the potential impact of frontier AI on cyber-risk in the financial system, which could undermine market confidence system-wide.