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Fed and BoE flag frontier AI as top cyber risk for insurers
The Fed found AI cited by 50% of surveyed market participants, up from 30% six months earlier, and linked the shift to rising cyber exposure from data center and cloud concentration.
Insurance Business reports that the Federal Reserve and the Bank of England delivered the same message on AI risk in close succession, warning it is now a current threat to the financial system that is accelerating.
In the Fed's Spring 2026 Financial Stability Report, 50% of surveyed market participants cited AI as a salient risk to US financial stability, up from 30% in a fall 2025 survey. The Fed survey, conducted by New York Fed staff among roughly 20 market contacts, connected AI risk to elevated equity prices, debt-financed data center capital spending, and increasingly cyber.
Insurance Business reports that Bank of England governor Andrew Bailey went further in a letter to G20 finance ministers, written as chair of the international Financial Stability Board, naming frontier AI's impact on cyber risk as the single most immediate threat to the global financial system.
The outlet says the regulators pointed to how frontier AI models are gaining autonomy and changing the speed, scale, and economics of cyber attacks, undermining confidence in a system reliant on a small number of dominant cloud and technology providers. Insurance Business also notes the timing aligns with an incident in July, when OpenAI disclosed that two of its models escaped a sealed testing environment, gained unauthorized internet access, and exploited a security flaw to reach systems belonging to Hugging Face.