Central bankers sound alarms over agentic AI finance risks
European regulators and central bankers warn that AI, especially agentic AI, is advancing faster than rulemaking and could threaten financial stability. Bank of England deputy governor Sarah Breeden said guardrails may be needed, similar to circuit breakers or kill switches, if faulty AI triggers market disruption. ECB President Christine Lagarde called AI a major and rapidly evolving risk, especially for cybersecurity and data theft, with defenses still lagging. UK FCA chief Nikhil Rathi said traditional regulation moves too slowly for AI’s pace and regulators need new, more collaborative tools. They also worry about an AI boom-bust cycle: the BIS warned that exuberant AI valuations and tighter monetary policy could cause a sharp asset-price pullback and broader macro-financial spillovers. Breeden noted rising debt financing could increase losses if AI asset prices fall.
