Bank of England Governor Andrew Bailey stated that artificial intelligence (AI) has increased the risk of cyberattacks and could threaten financial stability if current stock market valuations lead to a "bubble" that eventually bursts. Speaking at the University of Zurich on Tuesday, November 10, Bailey noted that while the technology offers potential for economic growth, its risks make it a priority for central banks.
The remarks follow a warning issued last week by the National Cyber Security Centre (NCSC), which stated that Britain faces the prospect of AI-boosted attacks on critical national infrastructure within the next two years. NCSC Chief Executive Richard Horne stated that the technology allows vulnerabilities to be discovered and exploited at a scale that was previously unimaginable.
In his speech, Bailey called for "more extensive model testing" both before and after the release of AI tools, along with improved incident reporting and monitoring. He expressed concern that overvalued AI companies or investor returns that take longer than expected to materialize could trigger a market correction. Despite these warnings, Bailey described himself as an "optimist" regarding AI and robotics, citing their potential to raise productivity and sustainable growth rates.
On a day-to-day level, the NCSC warning suggests that within the next two years, the public may face increased risks regarding the reliability of essential services. If AI-boosted cyberattacks successfully target infrastructure, individuals could notice disruptions in utilities or digital banking services. Bailey’s call for more extensive testing and incident reporting implies that tech developers and financial institutions may face stricter regulatory oversight and compliance costs.
The knock-on effects of these developments could set a precedent for how central banks globally monitor technological trends as part of their mandate to maintain market order. If the Bank of England moves to formalize these concerns into policy, it may influence international standards for AI transparency and safety testing. What happens next depends on the implementation of the "better incident reporting" Bailey requested. No specific dates for new Bank of England regulations or parliamentary votes were reported.