Bank of England warns AI traders could destabilize markets

Bank of England deputy governor Sarah Breeden has warned that agentic trading could pose risks to financial stability as AI systems move closer to operating directly in financial markets. Regulators are watching the rise of trading agents that can devise and execute strategies without human supervision, a shift from current uses of AI for research, data analysis and other operational tasks.

Investor interest is growing around firms such as EquiLibre Technologies, a Czechia startup founded by former Google DeepMind researchers that applies methods used to train poker algorithms to stock trading. The company was valued at $500m after a recent funding round and says its agents have maintained “a perfect record of zero negative months since inception”. Moment, a New York-based firm founded by former Citadel staff, is building infrastructure for wealth managers to deploy AI trading agents in fixed income and equity markets.

Breeden said large numbers of AI agents could react similarly to market events, creating herding behavior that amplifies volatility during stress. A “kill switch” may be needed to “limit or stop trading… if faulty AI models cause market meltdown,” while the Bank of England works with the German Bundesbank and the Bank for International Settlements on a policy response. Breeden also warned that advanced AI cyber capabilities could increase attacks capable of harming financial stability, calling for faster patching and more scenario planning.