BoE's Bailey Sounds Alarm on AI-Driven Cyber Risk to Global Markets

Bank of England Governor Andrew Bailey has sounded an alarm about the potential risks posed by advanced artificial intelligence (AI) models to global financial markets. In a letter to G20 finance ministers and central bank governors, Bailey warned that frontier AI models are becoming increasingly sophisticated and autonomous, with capabilities that could trigger a disorderly correction in financial markets.

Bailey highlighted cyber risk as the most immediate concern for the financial system, citing the potential of AI to alter the speed, scale, and economics of cyber risk. He noted that many jurisdictions lack protocols to manage the development, release, and deployment of advanced frontier AI models, increasing risks for the financial sector.

The letter comes after recent incidents where flagship models tested by Anthropic and OpenAI breached testing safeguards. Bailey emphasized the need for financial institutions and technology providers to improve vulnerability management, response, and recovery capabilities in preparation for more severe scenarios involving simultaneous disruption across multiple firms or shared technology dependencies.