Sarah Breeden, Deputy Governor for Financial Stability at the Bank of England, stated that current financial regulations are insufficient for managing autonomous AI systems. Speaking on June 30 at the European Central Bank forum in Sintra, she highlighted the risks posed by agentic AI, which operates without human intervention.
Breeden proposed implementing market-wide circuit breakers and kill switches to halt trading during AI-driven failures. She also suggested establishing enhanced recovery protocols, enabling banks to assume essential functions of other institutions during crises caused by autonomous systems.
Data from the Cambridge Centre for Alternative Finance indicates that approximately 52% of financial firms were using agentic AI by mid-2026. These systems are capable of executing trades, processing payments, and making commercial decisions at high speeds.
The official warned that correlated AI agents, which share similar training data and strategies, could increase market volatility. She also identified systemic cyber threats and unresolved legal issues regarding liability and consent as critical concerns for the financial sector.
The Bank of England is currently working with the Financial Conduct Authority and an AI Consortium to assess financial system resilience. These new proposals mark a shift in the central bank's stance, which previously considered existing regulatory frameworks adequate.
