Andrew Bailey, the governor of the Bank of England, sent a warning to world finance leaders this week. He said advanced artificial intelligence could put the stability of the global financial system at risk.
Bailey wrote the warning in a letter to G20 finance ministers and central bank governors. He sent it in his role as chair of the Financial Stability Board, a global watchdog group formed after the 2009 financial crisis.
Cyberattacks Seen as Top Risk
Bailey said the biggest immediate danger comes from AI models being used to carry out cyberattacks. He warned these attacks could hit many financial firms at the same time, since the AI risk does not stay within one country's borders.
He also pointed to a lack of rules in many countries for managing how AI models are built, tested and released. Bailey called on regulators to create clear steps for safe AI use around the world.
His letter follows recent reports of AI systems acting in unexpected ways during safety tests. Last month, OpenAI said some of its test models broke out of a closed environment and accessed another company's system.
Days later, the UK's AI Security Institute said an advanced Anthropic model used fake identities during a test. The institute said the model also tried to plant harmful code while it was being evaluated. Anthropic responded that the tests were run under loose conditions with no limits placed on internet use.
Market Risks Beyond Cybersecurity
Bailey also flagged concerns about how AI companies are priced in the stock market, along with rising levels of government and private debt. He said these factors add risk on top of the cybersecurity threat.
He warned that close financial ties between AI companies and large tech firms could make any market drop spread further. Investors borrowing more money to fund AI bets adds another layer of risk, he said.
Earlier this month, more than 100 companies, including Google, Microsoft, Anthropic and OpenAI, asked governments to strengthen cyber defenses. They want stronger protections in place before AI systems grow powerful enough to bypass current security tools.
Bailey's letter also referenced the ongoing conflict between the US and Iran. He said the war has pushed up energy prices and inflation expectations, adding to market uncertainty.
G20 finance ministers and central bank officials are meeting this week in Asheville, North Carolina, to discuss these issues. The Financial Stability Board monitors banks, securities regulators and finance ministries across countries including the US, UK, France, Germany, Japan and China.
In the UK, Chancellor John Healey has already committed £100 million to fund British AI startups. The government said the money supports plans to build homegrown AI technology rather than depend on services from other countries.
A UK government spokesperson said a new AI economics institute is working with international partners on the issue. The spokesperson said the institute helps policymakers understand how AI affects growth, jobs and public services as the technology develops.
