Bank of England Sounds Alarm on AI-Driven Global Financial Risk
Andrew Bailey, Governor of the Bank of England and chair of the Financial Stability Board, has sent a warning to G20 finance ministers about the potential risks of artificial intelligence on global financial stability.
The Bank of England is concerned that the massive capital pouring into AI could trigger a disorderly market correction with devastating cross-border ripple effects.
Financial watchdogs see tech valuations as stretched, built on circular funding and sky-high earnings forecasts. The core issue isn't just high valuations but how the money moves, hyperscalers and AI startups are entangled in complex cross-investments.
The Bank of England has repeatedly flagged the massive uncertainty surrounding the timing and scale of AI's productivity gains, which market valuations assume will be instant and revolutionary across every sector of the economy.