Bank of England's board approved extra money to deal with frontier AI risks

Serguey Asael Shinder02 October 2026, 17:482 min read

The Bank of England's Court of Directors, its governing board, approved additional funding in the current financial year to address the challenges posed by frontier artificial intelligence, according to the minutes of its meeting on 16 July, published on 1 October. The Governor described the work as vital.

The minutes record the Governor telling Court about the impact of renewed tensions in the Middle East on energy prices and about the Financial Stability Review, which listed the evolution of AI and its application among the key risks to financial stability. The Governor said the Bank was supporting banks to ensure they could gain sufficient access to AI models to protect their cyber security, and noted that the Financial Policy Committee had agreed a package of proposed changes to the capital framework for banks.

Court also approved proposals for the future backing-asset arrangements for banknotes, which a director noted were contingent on Monetary Policy Committee decisions about the stock of gilts held in the Asset Purchase Facility for monetary policy purposes. The minutes do not describe the new arrangements.

On costs, the Bank's finance director reported that it was on track to hit this year's cost-saving target. Non-executive directors stressed the importance of controlling how many posts vacated under a voluntary exit scheme are refilled, to avoid further cuts later; the Governors said most vacancies were open only to internal applicants. Court also approved a statement of the Bank's legal risk appetite intended to support "pragmatic, considered" risk taking, welcomed an internal evaluation of financial market infrastructure supervision for publication, and noted reviews finding the Financial Policy Committee and Court itself effective.

Why it matters

Two items reach beyond governance. A central bank funding work on frontier AI and helping banks get access to models for cyber defence treats AI as an operational risk to the system, not only a productivity story. And tying the banknote backing to decisions on the APF gilt stock links the Bank's balance-sheet run-down to an area most people never think about.