Bank of England Governor Warns AI Could Become a Major Threat to Global Financial Stability

Bank of England Governor Andrew Bailey has warned that increasingly powerful artificial intelligence models could significantly increase cyber risks and threaten the stability of the global financial system.

Bailey, who also chairs the Financial Stability Board (FSB), raised the warning in a letter to G20 finance ministers and central bank governors ahead of their meeting in the United States.

He described AI-driven cyber risk as one of the most immediate concerns facing global financial stability, warning that advanced AI systems could make cyberattacks faster, larger and more sophisticated.

According to Bailey, the latest frontier AI models are becoming increasingly capable of performing complex tasks with limited human involvement.

That could become a serious problem for banks, financial institutions and other critical infrastructure if malicious actors use the technology to identify and exploit software vulnerabilities at a speed that companies cannot match.

The Bank of England has previously warned that advanced AI could allow attackers to discover weaknesses and launch multi-stage cyberattacks much faster than before.

The global financial system is heavily dependent on digital infrastructure and a relatively small number of major technology providers.

Bailey warned that this concentration could make the impact of a major cyberattack much wider. If several financial institutions or shared technology providers were disrupted at the same time, the consequences could spread across borders and undermine confidence in the financial system.

The concern isn’t that AI itself is destined to cause a financial crisis. Rather, regulators are worried about how quickly the technology is developing compared with the ability of governments and companies to prepare for its risks.

Bailey called for greater international cooperation and stronger safeguards around the development and deployment of advanced AI. The Bank of England has already said financial institutions need to strengthen their ability to detect, contain and recover from AI-driven cyberattacks, particularly as AI systems become more capable.

At the same time, Bailey acknowledged that AI could also strengthen cybersecurity by helping companies identify and fix vulnerabilities more quickly.

The challenge, therefore, is making sure defenders can keep up with—or stay ahead of—the attackers. AI is rapidly becoming part of the global financial system, from banking and payments to trading and risk management.

But as these systems become more powerful and autonomous, the potential consequences of a major failure or coordinated cyberattack also become greater.

Bailey’s warning is essentially a call for the financial world to prepare now—before AI-powered cyber threats become too powerful to contain.