The Bank of England is stepping up efforts to assess the risks artificial intelligence poses to the financial system, using scenario analysis and simulations to better understand potential impacts.
In a letter to lawmakers, the Bank rejected claims by Parliament’s Treasury Committee that it was taking a “wait-and-see” approach, saying it is actively examining how AI investment and adoption are reshaping financial markets.
Deputy Governor for Financial Stability Sarah Breeden said the Bank is also working with international regulators to explore how AI agents could influence trading behaviour. A key concern is “herding” — where automated systems act in similar ways, potentially amplifying market selloffs during periods of stress.
Concerns around AI risks intensified following the launch of Mythos by Anthropic, which experts say could be used to identify and exploit cybersecurity vulnerabilities.
BoE Governor Andrew Bailey warned the technology may have “cracked the whole cyber risk world open,” highlighting the scale of emerging threats.
Meanwhile, the Treasury Committee criticised the UK government for delays in bringing major AI and cloud providers under the Critical Third Parties (CTP) regime — rules designed to regulate key suppliers to the financial system.
Committee chair Meg Hillier said the available powers were not being used quickly enough, leaving the system exposed.
Treasury minister Lucy Rigby told the committee that initial decisions on which firms will fall under the CTP regime are expected later this year, though she declined to name those under consideration.
