Story perspectives

UK Regulators Warn AI Risks; Fed Excludes AI Guidance

4/23/2026

Summary

Bank of England Warns AI

The Bank of England committee warned that AI risks could rise with agentic AI.
It runs scenario analyses on herding, provider concentration and autonomous decision impacts.
The Financial Conduct Authority cautioned UK lenders that rapid agentic AI adoption could expose consumers and the system to risk.
The Federal Reserve (Fed) issued SR 26-2 on April 17, excluding generative and agentic AI from its guidance, leaving major deployments outside examiners’ risk framework.

Summary

Banks Deploy AI

JPMorgan Chase raised its annual technology budget to roughly $18 billion, directing it to OmniAI, which reached 400 production use cases of agentic AI by early 2026.
Lloyds Banking Group projects that agentic AI will generate £100 million in value by automating fraud investigations and complaints.
Deloitte’s analysis of the MIT AI Risk Database lists over 350 risks from behavior and warns that simultaneous agent deployment across banks could create market hazards.

Summary

Regulators Eye Validation

Regulators lack tools to supervise AI that continuously learns in live markets, prompting a shift to continuous validation, interaction testing, and concentration monitoring for banks using similar models.
The Bank of England’s scenario analysis is the only effort, with the United States lacking a comparable framework.
The May 6, 2010 flash crash erased roughly $1 trillion in five minutes, showing how correlated algorithms can spark market turmoil.

History

Historical Context

The May 6, 2010 flash crash erased nearly $1 trillion in market value within minutes, driven by automated trading systems. The Securities and Exchange Commission and Commodity Futures Trading Commission later identified high-frequency trading as a key factor. Today, regulators face similar challenges with AI in finance, emphasizing the need for robust oversight to prevent disruptions reminiscent of the 2010 incident.

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Bank of England Warns AI

The Bank of England committee warned that AI risks could rise with agentic AI.
It runs scenario analyses on herding, provider concentration and autonomous decision impacts.
The Financial Conduct Authority cautioned UK lenders that rapid agentic AI adoption could expose consumers and the system to risk.
The Federal Reserve (Fed) issued SR 26-2 on April 17, excluding generative and agentic AI from its guidance, leaving major deployments outside examiners’ risk framework.

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