U.S. banking regulators are asking lenders about advanced artificial intelligence, including whether they use Chinese-developed technology and can shut down autonomous systems, as officials assess potential threats to banks and global financial stability. The inquiries reach large, midsize and smaller banks, but regulators haven't prescribed what lenders should do.
Regulators Seek Control Measures
The Federal Reserve, the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation are asking banks how they use advanced AI models, two people familiar with the matter told Reuters. Three people said regulators are asking whether banks deploy Chinese-developed technology, use AI agents in cyber defense and can control increasingly autonomous systems.
Their questions cover limits on systems, monitoring and approval of actions, and whether banks can track and audit agents' decisions. Regulators also ask what safeguards keep agents from exceeding their authority, whether humans remain involved in key decisions and how banks can shut down autonomous systems. The OCC, Fed and FDIC declined to comment.
The sources said the written and verbal inquiries address AI vulnerabilities and banks' readiness to respond. In the United States, scrutiny focuses on agentic AI in areas such as cybersecurity, including whether agents identify, prioritize and respond to threats. The questions reflect concern about how banks can maintain control as they adopt systems that perform tasks with minimal human supervision.
Recovery Plans and Financial Exposure
European supervisors, including the Bank of England and European Central Bank, are pressing banks to improve recovery plans. Three people familiar with their thinking said supervisors worry rapid AI advances could cause serious harm and disrupt financial markets sooner than previously feared. A senior executive at a large European bank said they were worried about potentially major damage to banking and financial markets “within six months.”
In Britain, supervisors encourage the largest banks to examine “bare metal” recovery plans. These systems operate independently of a bank's main technology setup and can be activated if primary operating systems are compromised. Two people familiar with the supervisors' thinking said building and maintaining them is expensive. UK authorities intend to work collaboratively with the industry rather than introduce new requirements. The Bank of England declined to comment.
In July, the ECB gave lenders an end-October deadline to produce plans addressing AI-enabled cyber threats, including improved backup and recovery. Asked about its regulatory strategy, the ECB referred to its July letter and a June speech by board member Frank Elderson, who called for a sense of urgency, not alarm.
Technology Dependence and Industry Warnings
European banks and regulators have expressed frustration at receiving limited access to Anthropic's Mythos this year, amid concerns that U.S. banks will get first access to test frontier models. UK supervisors ask banks to use frontier AI to identify vulnerabilities and accelerate patching; one source said lenders were doing a good job so far. Euro zone banks are also being asked to map AI use across their businesses and third-party providers, identify dependencies, and ensure they can switch off and restart systems in a controlled manner. One source said significant gaps remained at some firms.
The scrutiny follows warnings and reported incidents. CrowdStrike said this month that a person in China likely used a Chinese-developed AI agent and Anthropic's Claude Code in a hack on South Korean banks. Reuters also reported that rogue AI agents developed by OpenAI were involved in a breach of AI platform Hugging Face. Anthropic researchers have warned that increasingly powerful AI systems could eventually escape human control and pose an existential threat.
“The adoption of AI is often outpacing the ability to put the controls in place,” said Michael Woodbridge, London-based cybersecurity partner at Grant Thornton. Sukand Ramachandran, managing director and Senior Partner at BCG, said rapid recovery matters as much as prevention. Without separately held clean, secure copies of critical data, he said, “a serious attack could lock customers out of their accounts and disrupt payments across the wider economy.”