Advanced artificial intelligence poses risks to financial infrastructure, Bank of England governor Andrew Bailey warned today. Bailey outlined his concerns in a letter to G20 finance ministers and central bank governors, in his capacity as the chair of the Financial Stability Board. The document was made public shortly before the group convened for its annual meeting, according to a recent report by Silicon Angle.
The letter highlights fragilities in financial markets, including stretched asset valuations in the AI market and the role of debt in circular investment deals between AI companies and hyperscalers. A significant concern is the potential for large language models to launch cyberattacks.
Bailey noted that the interconnectedness of global financial systems, where top investment firms conduct numerous daily transactions often using technology from the same third-party providers, makes them vulnerable. A breach at a key provider could compromise multiple institutions.
The letter suggests preparing for disruptions affecting multiple entities simultaneously and implementing workflows for restoring critical systems from 'bare metal' after a cyber incident. The rapid identification of software vulnerabilities by AI models will necessitate faster patch rollouts by banks, a process that requires both development and rigorous testing. While frontier AI offers opportunities to strengthen cyber defense, advances in capability must be matched by resilience and preparedness, Bailey stated.
Kelley Damore is Chief Content Officer at CyberRisk Alliance, where she leads content strategy across the company’s digital brands, research, communities and live events serving CISOs and security practitioners. At CyberRisk Alliance, she is focused on delivering 365-day engagement, trusted journalism and actionable insights to help security leaders navigate an increasingly complex threat landscape.
Kelley Damore is Chief Content Officer at CyberRisk Alliance, where she leads content strategy across the company’s digital brands, research, communities and live events serving CISOs and security practitioners. At CyberRisk Alliance, she is focused on delivering 365-day engagement, trusted journalism and actionable insights to help security leaders navigate an increasingly complex threat landscape.
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