Bank of England governor warns of AI-related financial system risks
Bank of England governor Andrew Bailey today warned that advanced artificial intelligence poses risks to financial infrastructure.
Bailey outlined his concerns in a letter to G20 finance ministers and central bank governors. The document was made public shortly before the group convened in Asheville, North Carolina for its annual meeting. Bailey penned the document in his capacity as the chair of the Financial Stability Board, an international body that oversees the health of the financial system.
The letter warns that financial markets are vulnerable to a correction because of multiple “fragilities.” Bailey listed “stretched asset valuations” in the AI market as one such fragility. He also pointed to the role of debt in circular investment deals between AI companies and hyperscalers.
The rest of the two-page document mostly focuses on large language models’ ability to launch cyberattacks.
