‘Not everybody always wins’: Bank of England’s Bailey on the AI boom - The Next Web

Andrew Bailey went on the BBC on Thursday to assure the nation that the Bank of England is watching the money sloshing into AI 'very carefully,' which is central banking for 'we have a spreadsheet and a bad feeling.' AI has 'great potential to strengthen growth,' he conceded, and also 'substantial risks' — a formulation with the structural integrity of a forecast that says it might rain, or might not, forever. The Governor of the Bank of England has thus positioned himself squarely on both sides of the largest capital allocation of the decade. Very carefully, mind.

The telling line is Bailey's own diagnosis of the market: everybody is 'currently priced to be a winner.' That is not a compliment, it is a warning label, and he knows it — 'not everybody is a winner,' he added, which sounds like fortune-cookie wisdom until you recall that in a repricing the losers are rarely the people who wrote the prospectus. The Bank expects 'some shocks' to markets — 'some' doing the work of an airbag described as a cushioning event. And the losers of an AI correction will not be finding a Threadneedle Street backstop, because the Governor has already told us where he thinks the fixing should begin.

And then the money quote: regulation is 'not, in my view, the right place to start.' Splendid. The man who runs an institution built on the premise that regulation is precisely the right place to start — capital buffers, stress tests, the whole cathedral — has decided that for AI the beginning lies somewhere else, unspecified, later. Contrast Pramila Jayapal's proposed national charter system, which we flagged this month, treating AI firms like national banks and nuclear materials. Bailey would rather watch 'very carefully' and trust that any shock arrives with manners. Somewhere in the City, someone is still priced to be a winner — it will not be you.