Laura WilesThe Treasury Committee has published responses from the Treasury, FCA and BoE to its report on AI in financial services which warned of the risks of poor AI supervision.
All three regulators reject the characterisation the Committee adopted in its report that they are taking a risky “wait and see” approach to AI in financial services. Rather, the responses emphasise that existing regulatory frameworks already apply to AI, and that intervention will be risk-based and proportionate.
Specifically, the Treasury highlighted that it supports safe adoption of AI, not adoption at any cost, and that risk ought to be managed proactively. However, it disputed the idea that the overall framework is ineffective, and stressed the need for continuous review as technology evolves. In respect of the criticism around lack of progress in designating CTPs, the Treasury stated that it is gathering evidence on potential designations, which are expected in 2026.
The BoE’s response explicitly rejects the “wait and see” label, arguing that it is taking a proactive, outcomes-focused approach designed to remain flexible as AI evolves. It drew attention to ongoing work on microprudential and system-wide risk, engagement and coordination.
The FCA similarly restated the position that AI is already within its regulatory perimeter via conduct, governance, systems and controls and consumer protection rules. It highlighted its focus on supervisory engagement, sandboxes and live testing, as well as its coordination with the BoE on system and operational risk.