Bank of England Governor Andrew Bailey warned in a letter to G20 finance ministers and central bank governors that frontier AI models are becoming a significant risk to financial stability. ^[1] FSB chair Andrew Bailey, Governor of the Bank of England, warned of a 'potentially disorderly correction' in the markets that could spread across borders. ^[2] The Financial Stability Board (FSB) sent a letter to the G20 Finance Ministers and Central Bank Governors ahead of their two-day meeting, warning that AI, leverage, high asset prices, private credit, interconnectedness, and government debt pose risks to the global financial system. ^[3] Andrew Bailey argued that AI systems are becoming quicker at discovering vulnerabilities, faster at exploiting them, and more accessible to criminals. ^[4] Andrew Bailey argued that financial institutions should prepare for much more severe scenarios rather than smaller, more isolated cases of cyber disruption. ^[5] Andrew Bailey warned that elevated valuations of risky assets and intertwined financial investments among AI firms, cloud providers, and chip companies could lead to disastrous corrections if multiple simultaneous shocks occur. ^[6] Bailey stated that rising leverage is a feature of a maturing financial cycle that can intensify declines when sentiment turns, citing recent weeks as an example. ^[7]