FSB Warns Frontier AI Could Magnify Cyber Risks Across Financial System
By CU Today Staff —
BASEL, Switzerland—Frontier artificial intelligence could dramatically increase the speed, scale and affordability of cyberattacks, potentially undermining confidence across the global financial system, Financial Stability Board Chair Andrew Bailey warned G20 finance ministers and central bank governors.
Bailey said cyber disruption could spread across borders through shared infrastructure, common technology providers and international financial activity. Differences among countries’ legal frameworks, cybersecurity capabilities and recovery capacity could also create vulnerabilities extending far beyond the jurisdiction where an attack originates.
Financial institutions and technology providers should prepare for simultaneous disruptions affecting multiple firms and strengthen their vulnerability management, response and recovery capabilities, Bailey said. He stressed the need to restore critical systems and data from “bare metal” following a major incident and called for greater resilience among third-party technology providers serving the financial sector.
The warning came as Bailey also cited elevated financial system vulnerabilities stemming from sovereign debt markets, private credit, leveraged equity investing and stretched valuations—particularly in AI-related investments. A major shock or combination of shocks could trigger several of those vulnerabilities simultaneously, he said.
Originally reported by CU Today.