Bank of England’s Bailey Says UK Banks Still Lack Mythos Access

Asks if UK banks have access to the AI model 'Mythos' (Anthropic's Claude) and notes Anthropic told Bloomberg access would be granted within a week.

Unnamed Bloomberg Journalist

Andrew Bailey

Confirms UK banks do not yet have access to Mythos; the process has been delayed, possibly due to the US administration. Major UK banks have or will soon have access to other models.

The 'Glass Wing Phase 2' project has been discussed for six weeks but hasn't happened yet.

Raises the risk of open-source AI models, where vulnerabilities cannot be easily turned off if exploited by bad actors.

Unnamed Bloomberg Journalist

Andrew Bailey

Agrees that open-source models present a greater vulnerability than closed models, a conclusion drawn by Anthropic. Emphasizes that banks with strong cyber defenses will be better prepared.

Acknowledges there is a lot of open-source software and a 'theological' debate around it.

Questions the risk of US-owned companies dominating AI, forcing UK banks to 'go begging' for access.

Unnamed Bloomberg Journalist

Andrew Bailey

Argues that the spillover risks from AI in cyber are so large that a single national approach is insufficient; a firmly based international process is required due to the heavy interconnection of payment and messaging systems.

Disagrees with the premise of 'going begging', stating AI development is a very big and important development with many good things to come.

Asks if the US is listening to concerns about the risks of private credit, given its interconnection with traditional banks.

Unnamed Bloomberg Journalist

Andrew Bailey

States private credit is playing a good and important role in meeting investment demand for AI and tech. However, it is not an island; it is connected to the banking system, and it is vital to understand those interconnections and points of fragility.

The Bank of England is conducting a second system-wide exploratory scenario to study these interconnections. Also warns that retail investors must understand the assets they hold, as there are signs of strain and increased requests for liquidity outflows.

Asks if the Bank of England is scrapping its plan to cap individual stablecoin holdings and is instead looking at total issuance limits.

Unnamed Bloomberg Journalist

Andrew Bailey

Confirms the Bank of England will publish new proposals on stablecoins before the summer. A total issuance limit is an option. Emphasizes the need for global 'rules of the game' for cross-border stablecoin use.

States the goal is to get the benefits of digital technology in the payment system, whether through CBDC, tokenized deposits, or stablecoins, but all need 'rules of the road'.

Points out the US sees no need for such rules and views a lack of limits as a competitive advantage.

Unnamed Bloomberg Journalist

Andrew Bailey

States the rest of the world will take a different view on digital currency regulation than the US.

Asks if the Bank of England will ever issue a digital pound, given the US has banned a digital dollar.

Unnamed Bloomberg Journalist

Andrew Bailey

Expresses skepticism about the need for a new form of central bank money (CBDC). Argues the natural starting point is to explore tokenized deposits, which UK banks are already doing, as most money is already in commercial bank accounts.

The Bank of England continues to work on CBDC to understand the technology, but the key question is whether a new form of central bank money is needed to satisfy the need for digital technology in payments.

Asks how the Bank of England is using AI tools internally.

Unnamed Bloomberg Journalist

Andrew Bailey

The Bank of England uses AI for data analysis, coding, and modeling. It also uses language models to test how MPC minutes might be received by the market.

This is about the wording of communications, not about voting decisions.

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