BoEs Bailey sees major cybersecurity risks in new Anthropic model
By William Schomberg and Andy Bruce
April 14 (Reuters) – Central banks and financial regulators need to quickly understand the implications of a new artificial intelligence model that could pose major cybersecurity dangers, Bank of England Governor Andrew Bailey said on Tuesday.
“It would be logical to think that the events in the Gulf were the last challenge in this world for us until, I think it was last Friday, we saw that Anthropic had found a way to expose the whole world of cyber risk,” Bailey said at an event at Columbia University in New York.
Anthropic’s Mythos product has drawn warning from cyber experts about its potential to power sophisticated cyber attacks that could challenge the banking industry and existing technology systems.
Regulators want to “figure out what this actually means,” Bailey said. “The question is: To what extent will this new version of the product be able to detect vulnerabilities in other systems that can be used for cyber attacks?”
He said cyber risks have risen fastest on regulators’ list of concerns in recent years.
“It’s something that never goes away. You’ve got to continue to mitigate it, but threat actors will move on, so we have to deal with it,” Bailey said.
He devoted much of Tuesday’s event to discussing the issue of operational independence of central banks, which is “not robust enough” when it comes to financial stability issues.
Bailey argued that monetary and financial stability policies, which are often portrayed as separate issues and sometimes even conflicting with each other, should be viewed together within an overarching goal of preserving the value of money.
Although monetary policy is defined by numerical inflation targets, financial stability is more difficult to understand, leading to a distinction between the two, Bailey said.
“This is important because independence in terms of financial stability is otherwise not as robust and I think not robust enough,” Bailey said in his speech. he said.
His remarks come at a time when central banks on both sides of the Atlantic are facing increasing levels of political pressure, albeit to varying degrees.
In the United States, US President Donald Trump has called for lower interest rates and repeatedly scolded Fed Chairman Jerome Powell.
In the UK, finance minister Rachel Reeves has pushed regulators, including the BoE, to give greater weight to economic growth when making decisions.
Financial stability prevents special interests in the financial system and governments seek to boost economic growth by loosening regulations to boost credit, especially as memories of past crises fade, Bailey said.
Bailey said that just as monetary policy aims to protect the real value of money, financial stability policy also protects confidence in money, and the two should be seen as complementary.
“I think there is value in creating a single overarching narrative with a strong focus on the value of money. This would eliminate definitions of financial stability such as ‘tangential’ or ‘in conflict’,” Bailey said. he said.
(Additional reporting by Suban Abdulla; Editing by Andrea Ricci)
