Source: PYMNTS

PYMNTS reports that the Bank of England has issued a public warning on the financial risks posed by AI-driven algorithmic trading. The central bank states that the increasing speed and autonomy of AI systems used in financial markets could contribute to rapid, large-scale volatility, particularly during crises.

The Bank is exploring regulatory measures to improve oversight of AI in trading, including stress testing and transparency obligations. It emphasizes the need for human accountability, scenario modeling, and real-time intervention tools to mitigate the systemic impact of algorithmic misbehavior.

This follows broader global discussions about the role of AI in financial regulation and the need to balance innovation with macroprudential stability.