Bank of England Court Approves Frontier AI Investment and New Banknote Backing Arrangements
During the Bank of England's Court of Directors meeting on 16 July 2026, additional funding for frontier AI challenges was sanctioned, with Governor Andrew Bailey highlighting its significance. The Court also endorsed future backing-asset arrangements for banknotes, dependent on decisions from the Monetary Policy Committee regarding gilts. Bailey addressed the effects of energy prices stemming from tensions in the Middle East and discussed the Financial Stability Review, which identified AI-related risks. Changes to the bank capital framework were agreed upon by the FPC. Afua Kyei reported advancements in cost-saving objectives and recruitment limitations. Jo Hill presented the business planning for 27/28. The Independent Evaluation Office confirmed effective implementation of changes from the Financial Services and Markets Act 2023. An updated legal risk appetite was approved, and the Chair's effectiveness review was noted. Minutes from the 4 June 2026 meeting received approval.
Key facts
- The Court of Directors of the Bank of England met on 16 July 2026.
- Court approved additional investment to address frontier AI challenges in the current financial year.
- Governor Andrew Bailey said the frontier AI work was vital.
- Court approved future backing-asset arrangements for banknotes, contingent on MPC decisions on gilts in the Asset Purchase Facility.
- The Financial Stability Review noted risks including the ongoing evolution of AI and its application.
- The Bank is supporting banks to gain sufficient access to AI models to protect their cyber security.
- Afua Kyei reported the Bank was on track to hit its cost saving target this year.
- The IEO evaluation found FMID implemented changes from the Financial Services and Markets Act 2023 effectively and the FMI Committee was effective.
Entities
Artists
- David Roberts
- Andrew Bailey
- Sarah Breeden
- Clare Lombardelli
- Dave Ramsden
- Jonathan Bewes
- Sabine Chalmers
- Jitesh Gadhia
- Anne Glover
- Diana Noble
- Tom Shropshire
- Sarah John
- Sebastian Walsh
- Katharine Braddick
- Afua Kyei
- Jo Hill
- Zoe Hawtin-Rew
- Jane Cathrall
- Vijay Mistry
- Vicky Saporta
- Tom Smith
- Melissa Davey
- Louise Eggett
- Sasha Mills
- Rob Price
- George Johnston
Institutions
- Bank of England
- Court of Directors
- Audit and Risk Committee
- Remuneration Committee
- Nominations Committee
- Financial Policy Committee
- Monetary Policy Committee
- Independent Evaluation Office
- Financial Market Infrastructure Directorate
- EY
- Legal Directorate
- Financial Services and Markets Act 2023
Locations
- Middle East
- United Kingdom
- London