The governor of the Bank of England has warned G20 finance ministers that artificial intelligence could trigger a global economic downturn and pose severe cybersecurity threats to the world’s financial system.
Writing in his role as chairman of the Financial Stability Board (FSB), Andrew Bailey said that high valuations, heavy investor borrowing, and concentration in a small number of tech giants could cause a “future market correction” that would ripple worldwide if the AI sector falters.
Mr. Bailey urged international regulators to establish global standards for the safe release of AI models, warning that institutions must prepare for severe cyberattacks that could disrupt multiple firms simultaneously.
“The issue is not simply that investors are borrowing more, but that leverage is interacting with high valuations and market concentration… in a way that could amplify a future market correction,” he warned.
He added that energy market volatility caused by conflict in the Middle East was worsening existing vulnerabilities in the global economy.
The warning comes as the UK government attempts to expand its “sovereign AI” capabilities to reduce reliance on foreign technology and to apply homegrown models across sectors such as defense and the NHS.
However, central bankers and tech leaders remain concerned that rapid advances in frontier AI could easily bypass existing cybersecurity safeguards.
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