Bank of England Sounds Alarm on AI Risks in Financial Markets
Bank of England Governor Andrew Bailey is sounding the alarm on the risks associated with the rapid growth of Artificial Intelligence (AI) in financial markets. In an interview with the BBC, Bailey warned that AI could set off shocks in financial markets and that the UK must be ready for them.
The Bank of England is closely monitoring the massive influx of money into AI, which has reached a record $450 billion by early September, according to Morgan Stanley estimates cited by the Financial Policy Committee. This is more than double the total for all of 2025.
Bailey emphasized that while AI has 'great potential to strengthen growth', it also brings 'substantial risks'. He noted that everyone is currently priced as a winner in the AI market, but history shows that not everyone wins. Citing the example of Netscape, which was once a leader in internet search but no longer exists today, Bailey said: 'Not everybody always wins.'
The Bank expects 'some shocks' to markets and wants to ensure the financial system is resilient. Bailey also highlighted the risks associated with AI-driven cyber attacks and deepfakes. He has personally been targeted by deepfakes, with fake images of him in a physical fight with Nigel Farage spreading on social media.