Bank of England Weighs AI ‘Kill Switch’ to Prevent Market Meltdown
The Bank of England is considering introducing emergency «kill switches» and new regulatory safeguards to prevent autonomous artificial intelligence systems from triggering a financial market crisis, as concerns grow over the rapid adoption of AI in banking and trading.
Speaking at the European Central Bank’s annual forum in Sintra, Portugal, Deputy Governor Sarah Breeden warned that increasingly capable AI agents could amplify market volatility if they respond to shocks in the same way, potentially turning routine market stress into a wider financial meltdown.
Breeden said the Bank is assessing measures including market-wide circuit breakers, AI «kill switches» and enhanced recovery mechanisms that would allow one bank to maintain critical services if another experiences a technology-related failure. She added that existing financial regulations were not designed to oversee autonomous AI systems operating without continuous human supervision.
According to a recent Cambridge Centre for Alternative Finance survey, more than half of financial institutions are already using agentic AI, although mainly for lower-risk tasks. Regulators fear wider adoption in trading and payments could increase systemic risks unless new safeguards are introduced.
The proposals reflect growing international efforts by central banks and financial regulators to ensure AI enhances efficiency without undermining financial stability.
