Financial Policy Committee

The Financial Policy Committee (FPC) is the Bank of England's statutory body responsible for identifying and addressing risks to the stability of the UK financial system. In its April 2026 record — the first to address AI specifically — the FPC directed the Bank and the Financial Conduct Authority to conduct further work on agentic AI in payments and financial markets, noting that three-quarters of UK financial firms now deploy AI and that systemic risk from agentic deployment is "likely to increase rapidly". The Treasury Committee has separately called for AI-specific stress tests and clearer FCA guidance by the end of 2026.

Established under the Bank of England Act 1998 and given formal statutory powers by the Financial Services Act 2012, the FPC meets four times a year and publishes the Financial Stability Report twice annually. Membership includes the Bank's Governor (currently Andrew Bailey), Deputy Governors, and external appointees. Its REMIT covers macro-prudential regulation — setting capital buffers, controlling leverage, and flagging systemic vulnerabilities — rather than the day-to-day supervision of individual firms, which falls to the FCA and the Prudential Regulation Authority.

The April 2026 AI directive marks a significant broadening of the FPC's analytical perimeter. Agentic systems — AI that autonomously executes multi-step financial transactions — introduce correlated failure modes that existing stress-testing frameworks were not designed to capture. A single agentic model widely deployed across UK clearing and settlement infrastructure could propagate errors at machine speed, potentially breaching the circuit-breaker thresholds the FPC relies on during liquidity crises. The FPC's public framing of the risk as "likely to increase rapidly" signals that formal guidance, and possibly macro-prudential intervention, is expected before the 2027 review cycle.