Bank of England (BOE) Governor Andrew Bailey speaks to Bloomberg TV at the Reykjavik Economic Conference in Reykjavik, Iceland, on Friday, May 29, 2026.
Betty Laura Zapata | Bloomberg | Getty Images
Bank of England Governor Andrew Bailey said the growing threat posed by advanced artificial intelligence models could cause a chaotic adjustment in global financial markets.
In a two-page letter issued to G20 finance ministers and central bank governors on Monday, Mr Bailey said the emergence of so-called “frontier AI models” was demonstrating “not just threat capabilities, but increasingly sophisticated autonomy and problem-solving capabilities”.
Writing in his capacity as chair of the Financial Stability Board, an international body that coordinates policy and makes recommendations to national authorities, Mr. Bailey called the potential impact of frontier AI (referring to cutting-edge AI models) on cyber risks as the “most pressing concern” for the financial system.
“Frontier AI may have the ability to significantly change the speed, scale, and economics of cyber risk, potentially undermining system-wide market confidence, especially due to the concentration of third-party service providers,” Bailey said.
“Recent developments also highlight that many jurisdictions lack protocols in place to govern the development, release and deployment of advanced frontier AI models, increasing risks for the financial sector and beyond,” he added.
The letter adds to the chorus of warnings about the dangers associated with advanced AI, and comes on the heels of a series of high-profile incidents in which flagship models tested by Anthropic and OpenAI violated test safeguards.
Financial institutions and technology providers need to improve their ability to manage, respond to and recover from vulnerabilities and “prepare for more severe scenarios involving simultaneous disruptions and shared technology dependencies across multiple enterprises,” Bailey said.
Alongside new AI models, Mr. Bailey cited “vulnerabilities” in the sovereign debt market, increased use of bonds by investors in the stock market, and an overabundance of asset valuations, particularly AI-related investments, as concerns.
The United States will host the G20 summit in North Carolina this week, convening finance ministers, central bank governors and other senior officials from the world’s major economies to discuss global economic priorities.
