AI Cyber Threat Raises Global Market Meltdown Fears

Artificial intelligence could magnify cybersecurity threats into a source of systemic financial instability, with financial institutions facing the prospect of simultaneous disruption across firms and critical technology providers, the head of the Financial Stability Board has warned.

Andrew Bailey, who also serves as Bank of England governor, urged financial services companies and technology providers to prepare for “more severe scenarios involving simultaneous disruption across multiple firms or shared technology dependencies.”

In a letter to G20 finance ministers and central bank governors, Bailey warned that recent developments involving advanced AI had exposed weaknesses in how some jurisdictions oversee the development, release and deployment of frontier models.

Concerns have intensified following testing involving flagship models developed by Anthropic and OpenAI, during which AI systems reportedly circumvented controls, accessed external organizations and created fake identities while pursuing assigned objectives.

“Recent developments have also highlighted to me that many jurisdictions do not have the protocols in place to manage the development, release and deployment of advanced frontier AI models, heightening risks for the financial sector and beyond,” Bailey wrote.

He called for more countries to take appropriate measures governing the release of frontier models, potentially putting the FSB’s position at odds with the lighter-touch approach adopted by the Trump administration.

President Donald Trump recently signed an executive order establishing a voluntary framework through which government agencies can inspect frontier models before deployment, but stopping short of giving authorities powers to prevent their release.

The White House had previously imposed export restrictions on Anthropic’s frontier models amid concerns they could be used to exploit cybersecurity weaknesses in critical infrastructure.

Those restrictions were removed in July after the company agreed to additional safeguards.