Bank of England Governor Andrew Bailey Warns of Significant Cybersecurity Risks Associated with Anthropic AI Model

Central Banks Must Act Quickly on AI Cybersecurity Threats, Says Bank of England Governor

April 14, 2023 - Central banks and financial regulators must rapidly understand the implications of a new artificial intelligence model that could pose significant cybersecurity dangers, Bank of England Governor Andrew Bailey said on Tuesday.

Bailey's comments came as he addressed an event at Columbia University in New York, highlighting the need for regulators to "work out what this actually means" in relation to the potential of Anthropic's Mythos product to supercharge complex cyberattacks. The banking industry and its existing technology systems may be challenged by the new AI model, which has drawn warnings from cyber experts.

Cyber risks have risen rapidly in recent years, according to Bailey, and regulators must continue to mitigate the threat. "It's the one that never goes away," he said. "You have to keep mitigating it, but the threat actors will move on, so we have to deal with it."

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Bailey also dedicated part of his speech to discussing the issue of central banks' operational independence, which he argued is "not robust enough" when it comes to matters of financial stability. He suggested that monetary and financial stability policy should be viewed together within an overarching objective of protecting the value of money.

Bailey's remarks come as central banks on both sides of the Atlantic face increasing levels of political pressure. In the United States, U.S. President Donald Trump has called for lower interest rates and has repeatedly chastised Fed Chair Jerome Powell. In Britain, finance minister Rachel Reeves has pushed regulators to give greater weight to economic growth when making decisions.

Bailey emphasized that financial stability cuts across private interests in the financial system, as well as governments seeking to boost economic growth by loosening regulation to increase lending. He argued that financial stability policy protects trust in money, and that the two should be seen as complementary. "I see merit in creating a single overarching narrative with a strong focus on the value of money," he said.

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