Question to the HM Treasury:

To ask His Majesty's Government what steps they are taking to work with financial regulators to develop the use of AI-specific stress testing in financial services.

The Government’s ambition is to make the UK a global leader in AI, leveraging our dual strength in financial services and AI to drive growth, productivity, and consumer benefits. Encouraging safe adoption is an essential part of realising that ambition.

HM Treasury works closely with the UK financial regulators to monitor evolving risks from new technologies, and ensure that the opportunities AI presents can be realised in a safe and responsible way.

Stress testing is a key tool the Bank use to ensure the financial system is sufficiently resilient to a wide range of potential scenarios. The Bank intends to consider the macroeconomic and core financial market consequences of AI adoption under various scenarios. This will enable it to form a view on the range of outcomes that need to be encompassed by future stress tests, in order to capture the potential severe but plausible risks associated with the range of potential AI outcomes.