According to The Guardian, Bank of England Governor Andrew Bailey has joined a growing number of prominent figures warning the public about the potential global risks posed by the most advanced artificial intelligence technologies.
IT Home learned that Bailey currently serves as chair of the Financial Stability Board (FSB). In that capacity, he recently sent a two-page letter to finance ministers and central bank governors around the world, saying that “frontier” AI models are demonstrating increasingly powerful autonomous and problem-solving capabilities, while also possessing the ability to carry out threatening actions.
He warned that these models could disrupt the highly interconnected global financial system through cyberattacks, and that the damage caused by such attacks “can spread rapidly across different jurisdictions.”
Before a meeting held this week in North Carolina, United States, Bailey wrote to G20 finance ministers and central bank governors: “Recent developments have also drawn my attention to the fact that many jurisdictions have yet to establish appropriate mechanisms to manage the development, release and deployment of advanced frontier AI models, exacerbating risks in the financial sector and more broadly.”
Bailey’s letter has added to growing concerns about AI risks in recent weeks. Several prominent technology figures have issued warnings in succession, while Bailey’s views continue his earlier calls for the international community to cooperate in addressing AI risks. He previously told business leaders in the City of London: “No country can completely insulate itself from the cross-border systems that are ubiquitous today.”
Last month, 1,367 researchers and engineers from frontier AI labs also issued a joint warning, most of them from OpenAI, Anthropic and Google DeepMind. The letter offered further insight into what the engineers involved in AI research every day are concerned about.
The joint letter stated: “There is a real risk that the development of AI capabilities will rapidly outpace our ability to understand or control these systems.” It then called on the U.S. government to support “an international effort to develop the necessary technical and governance tools to deliberately control the pace of automated AI development.”
Earlier this month, reports also emerged that OpenAI employees had observed signs of unusual behavior in its most advanced AI agents weeks before the agents escaped their training environment, launched an unprecedented hacking campaign and attracted global attention.
Extending this concern further into the field of financial policy, Bailey said: “For the financial system, the most immediate concern is the impact frontier AI could have on cyber risk. Frontier AI could fundamentally change the speed, scale and economic cost of cyber risk, particularly where the financial system is highly dependent on a small number of third-party service providers, potentially undermining confidence across the market.”
Bailey called on the institutions responsible for safeguarding the global financial system to make it a priority to “take appropriate measures to support the safe and responsible release and deployment of frontier AI models worldwide.”
The letter also mentioned Bailey’s concerns about rising leverage in bond and equity markets. He said valuations in parts of the financial markets are currently at elevated levels, while markets are highly concentrated, and investors’ optimism about AI’s development prospects has particularly driven up valuations of related assets. Together, these factors could further amplify the scale of future market adjustments.
Bailey wrote: “I remain concerned, therefore, that a major shock, or multiple shocks occurring simultaneously, could trigger multiple potential risk points at the same time.”
Bailey has served as Governor of the Bank of England since March 2020. Before that, he led the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA), the two main financial regulators in the United Kingdom. Last year, he was appointed chair of the Financial Stability Board.
Headquartered in Basel, Switzerland, the Financial Stability Board coordinates the work of national financial regulators and international standard-setting bodies, promoting effective regulatory measures and policies to maintain global financial stability.