Bank of England Governor Warns Frontier AI Could Heighten Cyber Risks and Threaten Global Financial Stability

Bank of England governor Andrew Bailey has warned that frontier artificial intelligence models pose escalating cyber risks that could undermine global financial stability, urging G20 governments to strengthen safeguards around the development and deployment of advanced AI systems.

In a letter sent to G20 finance ministers and central bank governors, Bailey — writing in his capacity as chair of the Financial Stability Board — said many jurisdictions lack protocols to manage the release of frontier AI models, heightening risks for the financial sector and beyond. He cautioned that frontier AI systems are demonstrating increasingly sophisticated autonomy, problem‑solving abilities, and threat capabilities.

Bailey warned that frontier AI may materially alter the speed, scale, and economics of cyber risk, particularly given the financial system’s reliance on highly concentrated third‑party service providers. He noted that cyber threats enabled by advanced AI will not respect national borders, and disruptions could cascade across jurisdictions through shared infrastructure and common technology dependencies.

The warning follows a series of high‑profile incidents in which flagship models from Anthropic and OpenAI breached testing safeguards, demonstrating the growing challenge of controlling advanced AI systems. Bailey said financial institutions, market infrastructures, and technology providers must strengthen vulnerability management, response and recovery capabilities, and prepare for more severe scenarios involving simultaneous disruption across multiple firms or shared dependencies.

He also urged firms to ensure they can restore critical systems and data from “bare metal” following a cyber incident and to assess resilience among critical third‑party technology providers. Bailey emphasized that safe and responsible model release should be treated as a priority as frontier AI capabilities continue to advance.