AI boom could trigger market shocks, Bank of England boss warns

Regulatory frameworks or macroprudential tools deployed to cool AI-sector capital flows would likely reduce near-term volatility but could redirect investment pressure into other asset classes or geographies, creating a temporary repricing rather than a durable stabilization.

Central bank warnings without coordinated policy action historically tend to be absorbed by markets as commentary rather than constraint, allowing AI-linked valuations and capital concentration to persist until a trigger event forces repricing.

A sharp correction in AI-related equities or a credit event tied to overleveraged AI investment positions would plausibly transmit stress across equity indices and credit spreads, particularly if it coincides with broader monetary tightening or recession signals.