In letters to G20 finance ministers and central bank governors, Financial Stability Board Chair Andrew Bailey warned that frontier artificial intelligence models could increase cyber risk as their autonomy, problem-solving abilities and threat capabilities advance. He urged authorities to support safe and responsible model release and deployment, while calling on financial institutions to strengthen response and recovery capabilities and the resilience of critical third-party technology and other common service providers. Bailey also warned that rising leverage in equity and bond markets could combine with stretched valuations, market concentration and AI-related optimism to amplify a market correction. Wider vulnerabilities include volatile sovereign debt markets, private credit risks and energy-driven inflationary pressures linked to the Middle East conflict. The FSB is assessing possible action within its mandate and has finalized sound practices for responsible AI adoption following its earlier consultation. Its broader G20 work includes enhanced monitoring of cross-border vulnerabilities from global stablecoin arrangements, support for implementation of its 2023 stablecoin recommendations, principles for modernizing regulation and supervision, and reviews of resolution backstop funding and policy implementation.
Financial Stability Board Chair warns frontier AI could intensify cyber and market risks, urges safe deployment
Financial Stability Board Chair Andrew Bailey warned that frontier AI models could intensify cyber risk and urged authorities to support safe deployment. Financial firms should strengthen recovery capabilities and the resilience of critical service providers. He also cautioned that leverage, stretched valuations and AI-related optimism could amplify a market correction.