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BoE’s Bailey: Rigorous AI testing before UK regulation

By Drooid · Oct 1, 2026, 7:57 AM UTC · How we work

Summary

Bailey Urges AI Testing

Bank of England Governor Andrew Bailey said rigorous AI testing must precede formal UK regulation.
Bailey warned frontier AI could self-govern without safeguards, citing testing that reveals vulnerabilities.
President Donald Trump dismissed slowdown proposals and said executives signed a morally binding White House Super Intelligence accord.
OpenAI announced it will withhold its latest AI model citing safety concerns.

Summary

Policy Warns AI Debt

The Policy Committee warned AI-related debt of $450 bn this year exceeds the £333 bn gilt issuance planned for 2026.
Morgan Stanley estimates global AI-related debt issuance has doubled since 2025, reaching about $450 bn (?NT$14.3 trillion) by early September.
The committee kept the countercyclical capital buffer at 2%, indicating banks need not hold extra capital yet.
The report warned a sharper AI-asset valuation correction could spread to sovereign bond markets and global growth.

History

Historical Context

The May 6, 2010 flash crash on the New York Stock Exchange saw a $4.1 billion trade erase over 1,000 Dow points in minutes. Subsequent crashes—Singapore’s $6.9 billion plunge in 2013 and the 2015 Swiss-franc “Frankenshock”—prompted new rules such as minimum price ticks and short-position reporting. Regulators continue to cite these events when assessing algorithmic-risk safeguards.

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Bailey Urges AI Testing

Bank of England Governor Andrew Bailey said rigorous AI testing must precede formal UK regulation.
Bailey warned frontier AI could self-govern without safeguards, citing testing that reveals vulnerabilities.
President Donald Trump dismissed slowdown proposals and said executives signed a morally binding White House Super Intelligence accord.
OpenAI announced it will withhold its latest AI model citing safety concerns.

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