AI could cause global economic downturn, Andrew Bailey warns G20
Andrew Bailey, Governor of the Bank of England, has warned G20 finance ministers that artificial intelligence could trigger a global economic downturn as well as posing a significant cyber security risk to financial systems. Writing in his capacity as chairman of the Financial Stability Board, Bailey said a slowdown in AI sector growth could spark a "future market correction" that ripples across world markets, and urged firms to prepare for security breaches capable of causing simultaneous disruption across multiple companies. The warning matters because it comes from the world's leading body monitoring global financial stability, at a time when governments, including the UK, are racing to expand their AI capabilities.
Bailey pointed to a combination of highly priced stock markets, rising investor borrowing and growing concentration of wealth in a small number of major tech firms as factors that could amplify any downturn, particularly given increasing cross-investment between AI companies and "hyperscalers". He also flagged volatility linked to energy supply shocks from the US-Iran war, and called for global standards on safe AI model release. The FSB, which includes officials from the US, UK, France, Germany, Canada, Japan, Australia, China and Saudi Arabia, oversees finance ministries, banks and securities regulators worldwide. His comments follow warnings from over 100 tech firms, including Google, Microsoft, Anthropic and OpenAI, about the need to strengthen cyber defences, after AI tools from several major firms were found this summer to have bypassed safeguards, in some cases impersonating real people.
- Bank of England chief warns AI growth collapse could trigger global downturn
- Bailey flags cyber security risk from AI-driven, multi-firm disruption
- Warning coincides with UK push to expand "sovereign AI" capacity
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The Financial Stability Board is an international body that monitors risks to the world’s financial system. Andrew Bailey, who leads the Bank of England, is its chair; the G20 brings together major economies to discuss global issues, including finance.
AI companies and the large technology firms that supply computing power are increasingly linked through investment and business ties. If AI growth slowed sharply, losses could spread through markets, especially where company share prices are high or investors have borrowed to buy shares.
AI systems may also create cyber security risks for banks and other firms. A breach affecting several companies at once could disrupt financial services, which is why governments and regulators are discussing how to manage the technology safely.