Bank of England: Andrew Bailey warns AI models could ‘crack’ cyber systems
Bank of England governor Andrew Bailey has warned that a new AI model designed by a Silicon Valley company could “crack” cybersecurity systems, adding that the the technology poses a continuous challenge for key institutions.
Speaking at an event in New York, Bailey suggested Mythos Claude, which was created by Anthropic, presented a threat to the global economy as large as the war in Iran, which has led to spiralling oil and gas prices.
He told an audience that there were still a lot of unknowns on the threats to banking systems and other softwares, even as security officials in Whitehall and financial officials have looked to address the impacts.
“It would be reasonable to think that the events in the Gulf are the most recent challenge to us in this world, until, I think it was last Friday, you wake up to find that Anthropic may have found a way to crack the whole cyber risk world open,” Bailey said.
“The issue is: to what extent is this new version of the product going to be able to, in a sense, identify vulnerabilities in other systems which can be exploited for cyberattack purposes?”
He added that the cyber threat issue posed by AI was one that “never goes away” and the best public servants could do was to “keep mitigating it”.
His comments came a few days after the UK’s AI minister, Kanishka Narayan, said that programmers at the AI Security Institute found that Mythos was the “most capable” model ever tested.
Anthropic bosses, who are in the middle of a spat with the Trump administration in the US over ethics, decided not to release the model to the public over fears it could be exploited by hostile actors for hacking.
The model was instead shared with top executives at key technology firms such as Apple and Microsoft, as well as some governments.
Reeves ‘doesn’t use AI’
Bailey’s comments came as it was revealed that Chancellor Rachel Reeves does not use AI on a day-to-day basis even as she has made adoption of the technology key to her ambitions for boosting growth.
She told a Q&A at an event led by Mumsnet that she doesn’t “use anything” when asked about it.
She also joked that she may be “wrong” about not using AI to help with her chores and work.
Her relationship with Bailey is now seen as being more important than ever given that, according to top economic institutions such as the IMF and OECD, the UK economy is set to be hardest hit by the energy price spike caused by the war in the Middle East.
Bailey argues for focus on financial stability
Bailey used his speech at Columbia University in New York to argue that monetary policy and financial stability interact closely with public policy, as led by the government, and that the areas should not be treated as discreet matters.
He said financial stability was harder to measure and that current standards were “not robust enough”, adding that is was more vulnerable to private interests and lobbying efforts.
He concluded that central banks and other parties should focus on ensuring that the “value of money” is protected when policies are set.
“I see merit in creating a single overarching narrative with a strong focus on the value of money,” Bailey said.
“It would remove descriptions of financial stability such as “tangential” or “in conflict”. Even more important, it would help to anchor financial stability by emphasising the importance of the value of money.”