Bank of England deputy governor flags AI agents risk of market meltdowns

Bank of England Deputy Governor Sarah Breeden warned at a European Central Bank conference in Sintra, Portugal that autonomous artificial‑intelligence agents could amplify volatility in stressed market conditions. She said AI agents, unlike generative chatbots, can execute trades, payments and other multi‑step transactions without human approval, creating the potential for herd behaviour that could trigger a market‑wide melt‑down. Breeden urged regulators to examine new guard‑rails such as circuit‑breaker‑style kill switches and to assess whether existing technology‑agnostic frameworks are sufficient. She highlighted ongoing cooperation with the Bank for International Settlements, the Bundesbank and other systemic financial institutions, stressing the need for international coordination as AI capabilities spread across borders. While current AI use in finance is largely low‑risk, Breeden cautioned that rapid adoption of agentic AI could expose cyber‑vulnerabilities and challenge consumer‑protection safeguards.