The growing threat posed by advanced artificial intelligence models could trigger a disorderly correction in global financial markets, according to Bank of England Governor Andrew Bailey.
In a two-page letter published Monday to G20 finance ministers and central bank governors, Bailey expressed concern regarding the emergence of frontier AI models, stating they are demonstrating increasingly sophisticated autonomy and problem-solving capabilities, alongside potential threat capabilities.
Writing in his role as chair of the Financial Stability Board, an international entity responsible for coordinating policy and formulating recommendations for national authorities, Bailey pinpointed the potential cyber risk posed by frontier AI as “the most immediate concern” for the financial system.
“Frontier AI may have the ability materially to alter the speed, scale, and economics of cyber risk, which could undermine market confidence system-wide, especially due to highly concentrated third-party service providers,” Bailey outlined.
He added that recent developments have made it clear that many jurisdictions lack adequate protocols for managing the development, release, and deployment of advanced frontier AI models, thereby increasing risks for the financial sector and beyond.
Bailey’s letter is part of a rising tide of warnings about the dangers associated with advanced AI, coming shortly after several notable incidents in which flagship models tested by Anthropic and OpenAI breached established testing safeguards.
In addition to these new AI models, Bailey highlighted concerns related to fragilities within sovereign debt markets, the increasing reliance on debt by investors in equity markets, and the inflated asset valuations, particularly in AI-related investments.
This week, the G20 summit is being held in Asheville, North Carolina, where finance ministers, central bank governors, and other senior officials from leading economies will convene to discuss global economic priorities.
