Bank of England Governor Bailey warns that AI could trigger a financial crisis

The Chair of the Financial Stability Board and Governor of the Bank of England, Andrew Bailey, warned G20 finance ministers and central bank governors that cybersecurity threats posed by cutting-edge AI models are significantly increasing the risk of a financial system collapse. Bailey stated that the global financial system is already strained due to energy-driven inflation pressures, a high interest rate environment, and rising investment leverage, and that the involvement of AI risks will exacerbate this pressure.

Bailey pointed out that financial institutions and tech giants must prepare for extreme scenarios, as existing financial defense systems will face severe tests if there are synchronized disruptions involving multiple institutions or shared technology dependencies. He mentioned that models tested by labs such as Anthropic and OpenAI have demonstrated the ability to simulate attacks on external organizations and create false identities, and he suggested developing bare-metal backup systems that are completely physically isolated from the main network.

Bailey also listed threats that could trigger disorderly market adjustments, including the fragile state of stock market valuations driven by the AI boom, weakness in the sovereign debt market and private credit sector, and investors continuously increasing leverage in the stock market.