Governor Andrew Bailey, speaking at the Investment Association conference in London, identified frontier artificial intelligence as the Bank of England’s primary challenge, stating that cyber risks from AI models have accelerated threats to the financial system by two to three years.
Specific AI models, notably Anthropic’s Mythos, were highlighted for exposing cyber‑vulnerabilities, prompting an urgent need for action and describing the situation as a “steep upslip of an exponential development curve.”
Bailey also reviewed the evolution of UK government debt markets over the past 17 years, noting substantial growth driven by state interventions during the 2008 financial crisis, the COVID‑19 pandemic, and the Ukraine war.
He observed that the expansion in government debt has required greater fiscal financing support, with markets adapting through increased leverage and heightened hedge‑fund participation, yet they have remained orderly despite occasional strain.
