The governor of the Bank of England, Andrew Bailey, has called for society to retain the “right to intervene” in the artificial intelligence industry, warning that “rogue” frontier models could take the financial system hostage.

In an inaugural opinion piece for the Bank of England Insight series, Bailey wrote that the risks from rapid advancement of frontier AI — “a number of which have gone rogue in recent months” — were “real and increasingly significant.” That advancement, he said, reduced society’s ability to supervise and intervene when systems fail.

The new technology has increased the “scale and sophistication of cyber threats to the financial system,” according to Bailey, who warned it could threaten daily card payments, bank transactions, and stock and bond trading across financial markets.

Bailey wrote: “If we are to realise those benefits safely, we must answer one critical question. Should society retain the ability to intervene, to establish the boundaries within which these systems operate and to revise those boundaries as the technology evolves? To my mind the answer is unequivocally yes.”

The governor stopped short of calling for a regulatory clampdown. “Regulation is not, in my view, the right place to start,” Bailey said. “In the excitement surrounding AI development, there is a risk that we move too quickly to debates about regulatory architecture before establishing where the failure exists in the first place.”

He proposed instead a “sensible starting point” of rigorous testing of new models — to understand the behaviour of increasingly complex systems and to figure out “credible points” where authorities could intervene.

Separately, the Bank’s Financial Policy Committee warned that AI-sector debt has grown rapidly. Large players in the sector took on $450bn (£339bn) of debt between January and September 2026, according to the FPC — already exceeding the $333bn of gilts the UK government is due to issue for the entire year.

That has tied investors — including hedge funds, asset managers and private credit firms — to AI companies’ fortunes at a time when those tech businesses have yet to turn a profit.

Minutes from the FPC’s September 25 meeting said: “The rapid increase in artificial intelligence-related debt issuance broadens the exposure of capital markets to development in AI.” The committee “underscores the importance of timely and careful management of these intensifying, interconnected risks.”