Bank of England Deputy Governor Warns of AI Agent Trading Risks, Weighs 'Kill Switch'

Sarah Breeden, Deputy Governor of the Bank of England, has warned that regulators have little time left to prepare for the risk of market crashes triggered by autonomous AI agents. She noted that real-time human oversight of these agents is difficult, and if algorithms respond similarly to the same signals, they could form powerful feedback loops that amplify asset price volatility.

According to a global survey released in April 2026 by the Cambridge Centre for Alternative Finance, 52% of financial institutions surveyed are already piloting or deploying AI agents, with about 20% using them in production. Breeden revealed that the Bank of England is exploring a "kill switch" mechanism to restrict or halt trading when AI models stress markets. She said establishing governance to pause trading during periods of financial stress is "well worth exploring," though she is not fully clear how it would work in practice.

This is not the first time Breeden has raised the idea. At the European Central Bank forum on June 30, 2026, she suggested exploring safeguards similar to circuit breakers or kill switches to limit or stop trading if defective AI models caused a market crash. She also proposed using AI to build a "digital twin" of the financial system to simulate interactions among market participants. In June 2026, the Financial Stability Board published a global framework for responsible AI adoption by financial institutions. However, media reports note that AI technology is evolving faster than regulatory responses, and international consensus on risk management remains difficult to achieve.