Bank of England puts testing and intervention ahead of formal AI rules

On September 30, Reuters reported that Bank of England Governor Andrew Bailey called for rigorous model testing before and after deployment and for credible points of intervention to be established before a more formal regulatory framework. The Financial Policy Committee also said global AI-related debt issuance had reached about $450 billion, double its 2025 level, while advanced systems were increasing cyber and operational risks. For regulated clients and their counsel, the message is that governance must demonstrate how an organization detects, contains and escalates model failures, not merely that it has an AI policy. Law firms advising financial institutions should expect model assurance, incident reporting and supplier resilience to become connected supervisory questions.