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Bank of England Chief Flags Rising AI Risks to Global Finance
(MENAFN) Bank of England Governor Andrew Bailey warns that the rapid development of highly capable artificial intelligence systems could create new vulnerabilities for the global financial system, particularly by making cyberattacks faster, larger and potentially more damaging.
Bailey, who also chairs the Financial Stability Board, raises the issue in a letter addressed to G20 finance ministers and central bank governors ahead of their upcoming meeting in the United States.
He highlights the growing capabilities of so-called “frontier” AI models, describing them as systems at the forefront of technological development that are gaining greater independence, stronger problem-solving skills and more advanced capabilities that could potentially be used in cyber threats.
“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,” he said.
Bailey cautions that a major cyber incident involving advanced AI could spread beyond individual institutions because financial markets and services around the world are closely interconnected.
He also points to gaps in national regulations, noting that many governments have yet to establish adequate frameworks for overseeing how highly advanced AI systems are developed, released and deployed.
Bailey urges international authorities to coordinate their efforts and establish safeguards capable of addressing the emerging risks associated with increasingly autonomous AI technologies.
“Appropriate steps to support safe and responsible model release and deployment on a global basis.”
Bailey, who also chairs the Financial Stability Board, raises the issue in a letter addressed to G20 finance ministers and central bank governors ahead of their upcoming meeting in the United States.
He highlights the growing capabilities of so-called “frontier” AI models, describing them as systems at the forefront of technological development that are gaining greater independence, stronger problem-solving skills and more advanced capabilities that could potentially be used in cyber threats.
“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,” he said.
Bailey cautions that a major cyber incident involving advanced AI could spread beyond individual institutions because financial markets and services around the world are closely interconnected.
He also points to gaps in national regulations, noting that many governments have yet to establish adequate frameworks for overseeing how highly advanced AI systems are developed, released and deployed.
Bailey urges international authorities to coordinate their efforts and establish safeguards capable of addressing the emerging risks associated with increasingly autonomous AI technologies.
“Appropriate steps to support safe and responsible model release and deployment on a global basis.”
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