Andrew Bailey, Governor of the Bank of England and Chair of the Financial Stability Board, warned that frontier artificial intelligence is raising cyber risks and could increase the likelihood of market disruption. In a letter sent on Monday to G20 finance ministers and central bank governors, Bailey urged greater preparedness for AI-related threats.
In the letter, he said that advanced AI use could make ‘‘severe scenarios involving simultaneous disruption across multiple firms or shared technology dependencies’’ more likely. Bailey advised that financial institutions and service providers should be ready to restore critical systems from ‘‘bare metal’’ if necessary.
At the same time, central bankers attending the annual meeting in Jackson Hole were presented with dystopian scenarios in which AI agents could outmaneuver regulators and decision-makers. According to Reuters, participants were mainly concerned with the near-term, real-world implications of AI rather than only distant, theoretical threats.
The warning is part of a broader set of concerns about AI risks to critical infrastructure: increased automation and autonomous decision-making can weaken human oversight and raise the probability of system-wide disruptions, particularly when multiple firms rely on the same AI models or cloud-based technologies.
Bailey’s letter aims to draw attention to these risks and push the financial sector to strengthen technical and operational defenses, as well as to prepare recovery plans capable of quickly restoring services in the event of multi-firm outages.
(Source: Brendan Ruberry / reporting for Reuters)
