BoE Eyes AI Risks

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REGULATION Banks' AI Use Could Be Included in Stress Tests: BoE

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The Bank of England may soon factor AI risks in its annual bank stress tests, according to recent speech from Deputy Governor Sarah Breeden.

According to the BoE’s latest survey, 44% of third-party AI models used by financial firms come from just three providers, more than doubling the concentration seen in 2022, largely driven by increased interest in large language models following the launch of ChatGPT.

The BoE is aiming to address potential AI risks in market volatility, infrastructure dependence, and automated decision-making within core banking.

The speech echoes concerns from U.S. regulators. In September, SEC Chair Gary Gensler warned of potential sys…