Bank of England Governor Warns G20 of AI Threats to Financial Stability
Andrew Bailey, Governor of the Bank of England and Chair of the Financial Stability Board (FSB), has warned G20 leaders that advanced "frontier" AI models pose a threat to global financial stability. He highlighted that these models exhibit increasing autonomy and problem-solving capabilities, which could be leveraged to execute disruptive cyberattacks. This warning signals that AI risks are transitioning from theoretical safety concerns to systemic threats that could rapidly disrupt highly interconnected global financial systems. Furthermore, market optimism surrounding AI has driven up asset valuations, creating potential vulnerabilities that could amplify market corrections during a major shock. Bailey pointed out that many jurisdictions currently lack regulatory frameworks to manage the development and deployment of frontier AI models. He specifically warned that AI could fundamentally alter the speed, scale, and cost of cyber risks, particularly given the financial sector's heavy reliance on a small number of third-party service providers.
## BACKGROUND
Frontier AI models represent the most advanced general-purpose foundation models, such as large language models (LLMs), which are trained on massive datasets to perform complex reasoning. These models are increasingly shifting toward agentic AI, which refers to systems capable of pursuing goals and taking actions autonomously rather than just responding to simple prompts. The Financial Stability Board (FSB) is an international body based in Basel, Switzerland, that coordinates national financial authorities to promote global financial stability.