Cutting-edge AI models are the most urgent threat to the global financial system, the Financial Stability Board (FSB) is warning.
Ahead of the meetings of the G20 finance ministers and central bank governors that are taking place over the next couple of days, the chair of the FSB, Andrew Bailey, submitted a letter to those policymakers, highlighting the cyber risk posed by frontier AI as its most immediate concern.
Frontier AI models are complicating the risk landscape, given their growing autonomy and problem-solving abilities, it warned. With these capabilities, the models may “materially alter the speed, scale and economics of cyber risk, which could undermine market confidence system-wide,” it said.
Against that backdrop, the letter called on global policymakers to take action to ensure that these models are being released, and deployed, on a “safe and responsible” basis.
It also called for financial institutions to ensure that they have robust capabilities to respond to, and recover from, cyberattacks.
Alongside the growing AI threat, the letter warned that markets remain vulnerable to rapid, disorderly corrections, given the weaknesses in sovereign debt markets, private credit and stretched asset valuations, noting a correction could be intensified by the increased use of leverage in the bond and equity markets.
Additionally, the ongoing Middle East conflict has “exacerbated energy-driven inflationary pressures,” the FSB said.