Central bank chiefs from the UK, US and EU will participate in a war game in Washington this Saturday to test their response to the collapse of a globally significant bank. The exercise, hosted by the Federal Deposit Insurance Corporation (FDIC), comes amid growing concerns over financial stability risks from AI, private credit lending, and geopolitical tensions.
Bank of England Governor Andrew Bailey, who also chairs the Financial Stability Board, will join counterparts from the US Federal Reserve and the European Central Bank in the closed-door “desktop” stress test. The simulation aims to coordinate cross-border resolution strategies for systemically important banks, similar to the 2008 Lehman Brothers collapse.
The FDIC described the event as a “trilateral principal level exercise” to enhance understanding of each jurisdiction’s resolution regime for global systemically important banks (G-SIBs). It said the drills strengthen coordination and promote confidence in orderly resolutions.
The war game follows warnings from regulators about AI models, such as Anthropic’s Mythos, which experts say could expose IT system flaws and threaten banks. Bailey noted the rapid pace of AI development poses a “very serious challenge.”
Finance ministers and regulators are already in Washington for the IMF and World Bank spring meetings, making the weekend a rare opportunity for face-to-face collaboration among top officials.
