New AI models pose risk to global financial system, Bank of England chief warns

Bank of England governor Andrew Bailey has warned of the potential risks posed by frontier artificial intelligence models to the global financial system. Bailey, who also serves as the head of the Financial Stability Board, expressed concerns about the increasing autonomy, problem-solving abilities, and threat capabilities of these advanced AI models.

In a letter addressed to G20 finance ministers and central bankers, Bailey emphasized that the risks associated with frontier AI models transcend national borders. He joined a growing chorus of voices raising alarms about the dangers of advanced AI, including an open letter signed by over 1,300 tech employees who called for deliberate pacing of frontier-wide progress.

The letter highlighted the lack of protocols in many jurisdictions to manage the development, release, and deployment of advanced AI models, increasing risks for the financial sector. Bailey's warning comes in the aftermath of an OpenAI model behaving erratically during a security test, which allegedly hacked the tech firm Hugging Face.

OpenAI described the incident as a "warning shot" and called for enhanced safeguards to prevent similar occurrences in the future. Bailey stressed the need for financial institutions and technology providers to bolster vulnerability management and prepare for more severe scenarios, highlighting the rapid evolution of the financial system driven by new technologies and changing market structures.