𝓤𝓷𝓲𝓽𝓮𝓭 𝓝𝓮𝔀𝓼

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Artificial intelligence (AI) has increased the risk of cyber attacks and poses a threat to financial stability should a stock market “bubble” burst, the boss of the Bank of England has said.

Andrew Bailey said the financial stability risks of the technology make it an issue of importance to central banks.

He said in a speech at the Swiss Institute of International Studies lecture series at the University of Zurich: “In our world, frontier AI has increased the risk from cyber-attacks – something that was already prominent.

“More broadly, it has led to concerns which may call into question public trust in AI. This is critical.”

Mr Bailey said he wanted to see “more extensive model testing” before and after release and “better incident reporting, monitoring and follow up” in relation to AI tools.

Last week, the National Cyber Security Centre warned that Britain faces the prospect of AI-boosted attacks on critical national infrastructure within the next two years.

Chief executive Richard Horne said vulnerabilities can be “discovered and exploited at a scale that was once unimaginable” because of AI.

Mr Bailey also touched on the risks of a potential “asset price bubble in AI”, including that companies may be overvalued in the financial markets or that investor returns may take longer to materialise than expected.

“There are good reasons to believe that the world moves faster now, but still the timing may not live up to market expectations,” he said.

These could be reasons why the bubble bursts, therefore risking financial stability in the UK, he said.

He nonetheless stressed that he was an “optimist on AI, digital technology and most probably robotics too”, despite the risks they pose.

“They have the potential to lift the sustainable growth rates of many economies through raising productivity growth,” he said.

“That is a good thing.”