British Lawmakers Call for “AI Stress Tests” for financial services
Published January 19, 2026
A cross-party group of British lawmakers stated on Tuesday that the country’s financial watchdogs are not doing enough to prevent artificial intelligence from harming consumers or destabilising markets, according to Reuters. The group urged regulators to move away from what it called a “wait and see” approach.
In a report on AI in financial services, the Treasury Committee said the Financial Conduct Authority and the Bank of England should begin conducting AI-specific stress tests to help firms prepare for market shocks triggered by automated systems.
The committee also called on the FCA to publish detailed guidance by the end of 2026 on how consumer protection rules apply to AI, and on the extent to which senior managers should be expected to understand the systems they oversee. Committee chair Meg Hillier said in a statement, “Based on the evidence I’ve seen, I do not feel confident that our financial system is prepared if there was a major AI-related incident and that is worrying.”
The report acknowledged the benefits of AI but warned the technology also carries “significant risks.” These risks include opaque credit decisions, the potential exclusion of vulnerable consumers through algorithmic tailoring, fraud, and the spread of unregulated financial advice through AI chatbots.
Experts contributing to the report highlighted threats to financial stability, noting the reliance on a small group of U.S. tech giants for AI and cloud services. Some also noted that AI-driven trading systems may amplify herding behaviour in markets, risking a financial crisis in a worst-case scenario.
An FCA spokesperson said the regulator welcomed the focus on AI and would review the report. The regulator has previously indicated it does not favour AI-specific rules due to the pace of technological change. The Bank of England did not respond to a request for comment.
Hillier told Reuters that increasingly sophisticated forms of generative AI were influencing financial decisions, adding, “If something has gone wrong in the system, that could have a very big impact on the consumer.”
