Andrew Bailey warns G20 finance ministers that advanced artificial intelligence models could destabilize the global financial system

Andrew Bailey, the governor of the Bank of England and chair of the Financial Stability Board, issued a letter to G20 finance ministers and central bank governors warning of the risks posed by frontier artificial intelligence. Bailey stated that advanced AI models are showing increasingly sophisticated autonomy and problem-solving abilities, which could materially alter the speed, scale, and economics of cyber-risk. He warned that these models risk destabilizing the highly interconnected global financial system through cyber-disruption that can spread across jurisdictions. Bailey also expressed concern regarding market vulnerabilities, noting that high valuations, increased investor leverage, and the concentration of money into a small number of major technology companies could amplify a future market correction. He noted that the combination of these factors, particularly the cross-investment between AI companies and hyper scalers, could lead to a disorderly correction that spreads worldwide. To mitigate these risks, Bailey called on authorities to prioritize appropriate steps to support safe and responsible model release and deployment on a global basis. He emphasized that many jurisdictions currently lack the protocols necessary to manage the development and deployment of advanced frontier AI models.

Sources

• BBC
  AI could cause global economic downturn, Andrew Bailey warns G20
• Financial Stability Board
  FSB Chair’s letter to G20 Finance Ministers and Central Bank Governors: August 2026
• The Guardian
  AI could cause global economic downturn, Bank of England governor tells G20

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Paywall and unreadable sources

• WSJ
  G20 Warned Of Growing Threat to Financial Stability Posed By New AI Models
• Wolf Street
  AI, Leverage out the Wazoo, Sky-High Asset Prices, Private Credit, Interconnectedness, and Government Debt Pose Risks to Global Financial System