Bank of England Governor Andrew Bailey has warned that rapid advances in artificial intelligence could amplify existing vulnerabilities in the global financial system, although he did not predict that AI would inevitably cause a recession. He said elevated AI-related valuations, growing market leverage, concentrated investments and links between AI developers and major cloud providers could deepen a market correction, while frontier AI could enable faster, cheaper and more disruptive cyberattacks on interconnected financial institutions. Bailey called for coordinated international oversight, responsible AI deployment and stronger cybersecurity, recovery and contingency arrangements across the financial sector.