# AI is a threat to the stability of the global financial system, a top central banker says > Source: > Published: 2026-08-31 15:13:24+00:00 # AI is a threat to the stability of the global financial system, a top central banker says [Business Insider](https://www.businessinsider.com) The risk of a disruptive, AI-enabled cyber event derailing global markets is on the rise, says the chief of the BoE. - Global markets are vulnerable to "disorderly corrections," Bank of England chief Andrew Bailey says. - AI is ramping up the threat of a big upheaval in the financial system. - "The risks associated with frontier AI will not respect national borders," Bailey said. Investors love AI, but there's a risk the technology causes the next great upheaval in markets. That's according to Bank of England Governor Andrew Bailey, who wrote in a [letter published on Monday](https://www.fsb.org/uploads/P310826.pdf) that increasingly powerful frontier AI models are raising the threat level for [a disruptive cyber attack](https://www.businessinsider.com/openai-and-anthropic-kick-off-cybersecurity-frenzy-2026-5). "The risks associated with frontier AI will not respect national borders," Bailey wrote in a letter to G20 finance minsters. "For the financial system, the most immediate concern is the potential impact of frontier AI on cyber risk. He continued: "Frontier AI may have the ability materially to alter the speed, scale and economics of cyber risk, which could undermine market confidence system-wide." The rising interconnectedness of markets since the financial crisis has increased the risk of disruptions broadly, which is why — for example — stock investors in the US today are on edge about what's happening in Japan's currency markets. Throw an AI-enabled cyber attack into the mix, and it's easy to imagine how such an event could jolt the global system. Bailey notes that while world markets have held up relatively well to the historic [shocks caused by the Iran war](https://www.businessinsider.com/deflation-us-economy-inflation-outlook-iran-war-supply-chains-infrastructure-2026-8), risks are rising. He flagged vulnerabilities in areas like [private credit](https://www.businessinsider.com/michael-burry-ai-private-credit-risks-insurance-companies-big-short-2026-7), as well as the boom in leveraged ETFs as potential flashpoints of a disruptive event, and that the picture is "further complicated" by the rise of AI, with sophisticated and increasingly autonomous models pose growing cyber risks. Bailey's warning coming as the risk of a rogue AI is no longer theoretical. In July, [Hugging Face](https://www.businessinsider.com/smart-people-react-openai-hugging-face-hacking-cybersecurity-incident-2026-7) said that some systems were breached by an [autonomous AI](/glossary/autonomous-ai) agent that turned out to be an [OpenAI](/glossary/openai) model that broke out its sandbox. "We consider this incident to be an unprecedented cyber incident, involving state-of-the-art cyber capabilities, and are responding accordingly," OpenAI said in a statement. "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 urged a system-wide effort to strengthen defensive capabilities of the underlying market infrastructure and to prepare for the possibility of more severe scenarios involving the simultaneous disruption of multiple firms. "Taking appropriate steps to support safe and responsible model release and deployment on a global basis should in my view be a priority and would benefit all sectors of the economy, including by supporting financial stability and economic growth," he wrote. [Business Insider](https://www.businessinsider.com/ai-threats-financial-markets-cyber-attacks-boe-global-finance-2026-8) Get AI news in your inbox Daily digest of what matters in AI. ## Key Terms Explained [AI Agent](/glossary/ai-agent) An autonomous AI system that can perceive its environment, make decisions, and take actions to achieve goals. [Autonomous AI](/glossary/autonomous-ai) AI systems capable of operating independently for extended periods without human intervention. [Hugging Face](/glossary/hugging-face) The leading platform for sharing and collaborating on AI models, datasets, and applications. [OpenAI](/glossary/openai) The AI company behind ChatGPT, GPT-4, DALL-E, and Whisper.