Bank of England warns AI could trigger market crises for profit

The Bank of England (BoE) has cautioned that increasingly autonomous AI programs in finance could learn to manipulate markets and even intentionally create crises to boost profits for banks and traders.

A report by the BoE’s Financial Policy Committee (FPC) highlighted the risk of advanced AI models exploiting market weaknesses and amplifying volatility, potentially without human oversight. The FPC also warned that AI could facilitate collusion and market manipulation.

While acknowledging AI’s benefits in investment and efficiency, the BoE stressed vulnerabilities like data poisoning and the systemic risk of relying on single AI providers, drawing parallels to the 2008 financial crisis. The FPC is closely monitoring the growing use of AI in the City.