THE GOVERNOR OF THE BRITISH CENTRAL BANK WARNED AI BLACK SWAN: FRONTLINE MODEL OR MAGNIFY THE RISK OF FINANCIAL CRISIS

ON 31 AUGUST, THE GOVERNOR OF THE BRITISH CENTRAL BANK AND PRESIDENT BAILEY OF THE FINANCIAL STABILITY COUNCIL (FSB) WARNED THE G20 AND THE CENTRAL BANK GOVERNOR THAT THE NETWORK SECURITY RISKS POSED BY THE FRONT-LINE AI MODEL COULD RESONATE WITH EXISTING VULNERABILITIES, SUCH AS HIGH INFLATION, HIGH INTEREST RATES AND FINANCIAL MARKET LEVERAGE, AND FURTHER BOOST THE RISK OF SERIOUS SHOCKS TO THE GLOBAL FINANCIAL SYSTEM. BAILEY NOTED THAT THE EXISTING FINANCIAL DEFENCE SYSTEM COULD FACE A SERIOUS TEST IF THERE WERE A PARALLEL SYSTEMIC DISRUPTION OF FINANCIAL INSTITUTIONS OR SHARED TECHNOLOGY SUPPLIERS. AT THE SAME TIME, AI-DRIVEN CAPABILITIES SUCH AS CYBERATTACKS, FALSE IDENTITY FRAUD, ETC. ARE BEING RAPIDLY ENHANCED, WHILE SOME COUNTRIES HAVE YET TO ESTABLISH A MATURE REGULATORY FRAMEWORK FOR THE DEVELOPMENT, RELEASE AND DEPLOYMENT OF FRONT-LINE AI MODELS. BAILEY ALSO WARNED THAT THE HIGH VALUATION DRIVEN BY AI, DEBT PRESSURES IN THE AREAS OF SOVEREIGNTY AND PRIVATE CREDIT, AND THE ACCUMULATION OF MARKET LEVERAGE, COULD BE POTENTIAL TRIGGERS FOR "UNORDERED ADJUSTMENT" IN FINANCIAL MARKETS. HE RECOMMENDED THAT FINANCIAL INSTITUTIONS DEPLOY A "NAKED MACHINE" BACK-UP SYSTEM THAT WAS PHYSICALLY ISOLATED FROM THE MAIN NETWORK IN ORDER TO IMPROVE RESILIENCE IN THE AFTERMATH OF A CATASTROPHIC CYBER ATTACK。