Bank of England's Bailey warns an AI asset-price bubble poses clear financial stability risks
In a Zurich speech, Andrew Bailey said AI returns may take longer than markets expect and that "everyone is priced to be a winner", citing Netscape.
Why it matters
Bailey, who also chairs the global Financial Stability Board, gave four ways an AI bubble could burst: markets overvaluing good returns, returns arriving later than expected, not every company winning, and fragile public trust. He also said frontier AI has raised cyber-attack risk and called for more model testing before and after release. The warning follows a week in which City AM says more than £2.4 trillion was wiped off US stocks. Watch whether the Bank's next Financial Stability Report puts numbers on AI exposure.
Key facts
- Speech at the SIAF lecture series, University of Zurich, 9 Nov 2026
- Bailey chairs the Financial Stability Board
- Cited Edison's electricity and Netscape
- Called for more model testing before and after release