BOE Warns on Escalating Risks From AI, Fallout From Iran War

Financial institutions’ use of artificial intelligence could increase rapidly and become a financial stability threat, the Bank of England warned on Wednesday, as it also called out the potential for the technology to trigger shocks in the private credit markets that ricochet more broadly.

In its first update since the outbreak of war in Iran on Feb. 28, the BOE’s Financial Policy Committee also said resulting disruptions had delivered a “substantial negative supply shock” to the global economy that would “weigh on growth, increase inflation and tighten financial conditions.”