Bank of England governor Andrew Bailey warned that people could be misled about legal liability when authorising AI agents to make payments and other financial transactions. Bailey said regulators "have got to address" the concern. Bailey spoke at a Group of Thirty event in Bangkok on Saturday.
Bailey said most legal systems allow people to create economic agents but not legal agents. Bailey said responsibility, liability and risk management were therefore particularly relevant. Bailey, who also chairs the Financial Stability Board, called rapid AI development "a major issue" for financial stability. Bailey said model testing was more important than regulation, partly to build public confidence that AI was being developed responsibly.
AI has dominated discussions among public officials and private bankers gathered in Bangkok this week for the IMF annual meeting. Several big Wall Street banks have restricted AI agents from accessing client accounts. Lenders raised concerns with regulators that AI agents could drain deposits by moving idle cash in search of higher returns.
G7 finance ministers in Bangkok this week discussed simulated drills and tabletop exercises against major cyber attacks using frontier AI models. The proposed exercises would address attacks targeting the financial sector and global markets. IMF managing director Kristalina Georgieva told the same G30 event that the implications for financial stability could be very serious. Georgieva questioned whether humans could end up without money in a world with non-human intelligence. Georgieva warned that failing to establish safeguards now could leave authorities unable to control the technology later.
South Korea's president said in recent weeks that there were signs AI models had been used in attacks on banks. The UK's Financial Conduct Authority warned that frontier models were finding cyber security flaws faster than financial services companies could address the flaws.
Bank of Korea governor Shin Hyun-song told the G30 event that AI was highly opaque but very capable. Shin said regulators could still rely on tools developed after financial crises, including capital requirements, leverage restrictions and minimum collateral levels. Shin said some basic rules would remain relevant despite the uncertainty surrounding AI.
BoE Governor Warns of Legal Liability Risks with AI Agents in Finance
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Summary
Bank of England Governor Andrew Bailey raised concerns about legal liability risks tied to AI agents in finance during a Group of Thirty event in Bangkok. He noted that while economic agents are recognized, legal ones are not, complicating responsibility and risk management. Bailey stressed the need for model testing over regulation to build trust in AI. His remarks align with global efforts under MiCA and CFT frameworks to address regulatory gaps in emerging financial technologies.
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