Bank of England warns of rising risks from AI debt and AI systems

The Bank of England's Financial Policy Committee stated that the likelihood of interconnected financial vulnerabilities crystallising had risen, citing rapid growth in AI-related debt issuance estimated at around $450 billion globally. Governor Andrew Bailey separately emphasised the need for rigorous pre- and post-deployment testing of frontier AI models. The committee linked advances in AI to elevated cyber and operational risks while keeping the countercyclical capital buffer unchanged.