Frontier AI Models Pose Threat to Global Financial Stability

Bank of England Governor Andrew Bailey has issued a warning to G20 leaders about the potential risks associated with frontier AI models. These advanced AI systems are rapidly gaining autonomy, problem-solving ability, and threat capabilities, which could increase cyber risks and threaten global financial stability.

Bailey emphasized that the risks posed by frontier AI would not be limited to national borders, as a successful attack on a bank or major technology provider could spread through shared technology and infrastructure, as well as cross-border financial activity.

The warning comes as global markets are already facing several financial stability risks, including vulnerabilities in sovereign debt markets, private credit, and stretched asset valuations. Bailey also highlighted growing leverage in bond and equity markets, which could amplify a future market correction if not addressed.

He urged authorities to support the safe and responsible release and deployment of advanced AI models, while calling on financial institutions to strengthen their ability to respond to and recover from cyberattacks.