The Bank of England's Financial Policy Committee published its first dedicated assessment of AI and financial stability on 9 April 2025. It identifies four risk channels — greater use of AI in banks' and insurers' core financial decision-making such as credit and insurance underwriting, greater use of AI in financial markets, operational risks from concentrated AI service providers, and a changing cyber threat environment — and commits the FPC to monitoring each. In its April 2026 Record the FPC judged that generative and agentic AI were not yet deployed at a systemically risky scale, but asked the Bank and FCA for further work on agentic AI in payments and markets.
| Document | FPC Financial Stability in Focus: AI (Apr 2025) — Financial Stability in Focus: Artificial intelligence in the financial system |
| Issued by | Bank of England, Prudential Regulation Authority, and Financial Conduct Authority |
| Type | Report |
| Status | Final |
| Published | Apr 9, 2025 |
| Applies to | Macroprudential assessment covering banks, insurers, market participants and AI service providers; no direct obligations |
| Official source | bankofengland.co.uk ↗ |
| Use cases | AI governance (general) · Trading & capital markets · Third-party & vendor AI · Cybersecurity · Credit scoring & underwriting · Generative & agentic AI |
What are the key points of FPC Financial Stability in Focus: AI (Apr 2025)?
- Four channels: (1) AI in core financial decision-making (credit and insurance underwriting), (2) AI in financial markets, (3) operational risk from AI service providers, (4) AI-driven cyber threats.
- Notes that AI could shift capital allocation by enabling new data sources in underwriting, with risks of correlated models and herding.
- Warns of concentration in a small number of foundation-model and cloud providers, linking to the Critical Third Parties regime.
- Sets out the FPC's monitoring approach, drawing on the BoE/FCA surveys and the AI Consortium.
- Followed up in the FPC's October 2025 and April 2026 Records; the April 2026 Record judged agentic AI presents particular risks spanning several channels.
What did FPC Financial Stability in Focus: AI (Apr 2025) change for banks?
This moved UK AI oversight from firm-level supervision to a system-level framework. It is the reference point the FPC and BoE now use to decide whether AI adoption warrants macroprudential intervention, and it explains why agentic AI and third-party concentration are the two issues UK regulators are watching most closely.
What are the Bank of England's four AI financial-stability risk channels?
AI in banks' and insurers' core decision-making, AI in financial markets, operational risk from AI service providers, and AI-driven changes to the cyber threat environment.
Does the FPC think AI is a systemic risk today?
As of April 2026, no — it judged that generative and agentic AI are not yet deployed in a manner presenting systemic risk, but expects risks to rise, potentially rapidly.
| Date | Document | Status |
|---|---|---|
| Jul 14, 2026 | HM Treasury Financial Services AI Adoption Plan (Jul 2026) — Financial Services AI Adoption Plan | Final |
| Jun 5, 2026 | 2026 BoE/FCA AI survey — The Bank of England and FCA's 2026 AI Survey | Final |
| May 15, 2026 | BoE/FCA/HMT joint statement on frontier AI and cyber resilience (May 2026) — The Bank, FCA and HM Treasury joint statement on Frontier AI models and cyber resilience | In force |
| Apr 1, 2026 | BoE response to Treasury Committee AI inquiry (Apr 2026) — Response to TSC inquiry report on AI in financial services | Final |
| Apr 1, 2026 | BoE/PRA plan for safe AI innovation (Apr 2026) — Letter from Sarah Breeden and Sam Woods to the Chancellor and Secretaries of State on enabling safe AI innovation | Final |
| Jan 28, 2026 | DSIT/DBT strategic letters to regulators (Jan 2026) — How will regulators enable safe AI-powered innovation: joint letter from DSIT Secretary of State and DBT Secretary of State | Final |
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