Andrew Bailey warns emerging AI models threaten financial stability amid global uncertainty
Financial Stability Board Chair Andrew Bailey sent a letter to G20 leaders on August 28 highlighting growing risks from new artificial intelligence systems capable of exploiting digital vulnerabilities in banking infrastructure.
Andrew Bailey, Chair of the Financial Stability Board and Governor of the Bank of England, warned that new AI models pose a growing threat to financial stability and economic growth. He sent this letter to G20 finance ministers and central bankers ahead of their meeting on Monday and Tuesday in Asheville, North Carolina, United States. Bailey noted that many jurisdictions lack sufficient protocols to manage these emerging risks effectively.
Bailey stated the FSB will remain focused on identifying vulnerabilities, strengthening resilience, and ensuring innovation aligns with financial stability goals. His warning emerges during a period of profound global instability and uncertainty that is heightening market volatility. Conflicts in the Middle East are driving up energy prices and fuelling inflation, while large-scale AI investments in the United States add further inflationary pressure. Unprecedented trade decisions by US President Donald Trump are also contributing to an increasingly unpredictable economic environment.
Bailey emphasized that a new generation of sophisticated AI systems is emerging. These systems can identify and exploit digital vulnerabilities in complex systems, such as banking infrastructure and sensitive servers, with potentially catastrophic consequences for the economy. The threat level requires immediate attention from global regulators to prevent future systemic failures.
