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And thank you, Governor, for joining us. At this conference, we did have an opportunity to hear from you and talk to you about monetary policy this morning, but there's also been a lot of conversation about AI and the potential impact on the economy of AI, but also the cybersecurity risks associated with new AI tools. And of course, most recently, the one we've been hearing about, worrying about, is Mythos. Can I just confirm, have UK banks got access to Mythos now? Are they getting it on that trial basis?
So, they don't have access to Mythos at the moment, and that's an issue that is very important. And by the way, this is a very important development. But there are other models out there. Mythos isn't the only model out there. There's obviously something of a race going along to move the technology on. And you know, I'm very optimistic that they either just have or are about to get the major UK banks have access to other models, which will get them substantially.
But just going back to Mythos, sorry, because we had a story, in fact, I think Anthropic's UK and Northern Europe's head, the company that actually makes Mythos, they told Bloomberg last month that it would be within a week that UK bank chiefs were going to be able to be part of the Glasswing project. So, do you know what happened?
Well, there has been a Glasswing phase two being talked about really for the last six weeks or so, but it hasn't happened yet. And I think this has been somewhat caught up in the process with the US administration.
So, sorry, just reading between the lines, it sounds like Anthropic had certainly told us on Bloomberg Television that it was going to be just a matter of days or a week or so, and it's the US administration that has potentially.
Well, we're not party to that process. I think to be fair to Anthropic, I think they have been working very hard. They want access to critical parties, and it's very important. They're still, I think, actively seeking that. Quite why the process is a bit different from one company to another, I'm afraid I can't explain to you. Obviously, from our point of view, given our concern about the risks involved in this, it's very important that there is access. And what I really want to see is to evolve a process very quickly where we can have a sort of controlled but fast process to assess these models, and frankly, as my head of IT at the Bank of England told me, is a ton of patching that then has to follow very quickly to fix the things that these models are finding.
And I guess as part of this conversation, I guess we also think about, I mean, one of the conversations I have when I get nervous is when they also talk about the open-source, the companies that are a bit behind, the way they get users is to have open-source, which means if you discover that the so-called bad guys are using that technology to rob banks or whatever it is, you're then not able to turn it off in the way you can with the others.
Well, look, I'm not speaking as an expert on this subject. I obviously, well, yeah, we try to learn quickly. I think two things that I've taken from the many discussions we've had. One is that I think if you have kept your cyber defenses up and better prepared, you will go into this process in a better place than if you haven't. And we've worked very hard with UK banks over many years, and we'll go on doing so. Secondly, I think you're right on the open-source point. Now, I think what Anthropic is certainly saying is, 'Look, open-source is more of a vulnerability than closed.' And that's certainly a conclusion they've drawn from all the work they've done. Now, I mean, the two things I think you have before you. One is there's a lot of open-source out there. Two, again, I'm not an expert in this field, there's a lot of almost theological doctrine about open source and not open source, which this is somewhat pushing against.
Yeah, I think because we've tended to say there's been a sort of inclination towards open source, but in this case it feels like it's more.
It's being questioned, yeah, yeah.
I mean, does it highlight sort of overall the risks of, I mean, going back to the Anthropic thing of having US-owned companies being absolutely dominant in this space? And actually, UK banks, you being in a position of kind of going begging to the Americans to get access to it.
Well, look, I don't take a particular position on where the sort of, in essence, the companies are based or are developing these things because this is a very, very big development and it's actually very important and there are many good things that will come out of this. What I would say is that the spillover from this sort of cyber risk are so big that we can't just have a single sort of national approach towards dealing with the consequences and mitigating it. There's got to be an international approach to this. It's got to be a sensible sort of firmly based international process because I think anybody who thought, 'Well, I've dealt with my banks, that's okay,' I'm afraid that won't work because they're all so heavily interconnected. We've got big payment systems, big messaging systems. So, that approach won't work.
Now, as chairman of the Financial Stability Board, you're obviously involved in lots of discussions around sort of global efforts on financial stability and looking for risks. And one area again where people are looking nervously at the US in particular is the run-up of private credit. And whether there should be a more of a tougher approach to at least having more reporting requirements or other things on private credit. You've highlighted that a lot of traditional banks and institutions are now very much intertwined with private credit. Is that, I mean, are you getting a hearing on that from the US in terms of the risks of that?
Excuse me, yes. I think, look, first of all, private credit is playing an important role. I think it's a good thing. Let's come back to AI for a moment. We've got a very big investment demand going on for it to support the innovation in AI and in the tech sector more broadly and private credit is an important part of meeting that demand and that's a good thing. What's, I think, you know, I think we have to look very carefully at it. The word private can be misleading in some ways because it is not an island on its own. It is connected into the broader system. A lot of the underpinning liquidity will come from the banking system. It is connected into the banking system. That's not bad. That's inevitable. So it's very important that we understand those interconnections, how they work. Are there points of sort of fragility in there? That's why the Bank of England were doing a second system-wide exploratory scenario to follow on the one we did on hedge fund activity and major government bond markets a couple of years ago. So that's the first thing. The second thing I think is important is, and I think this is particularly true with the spread into sort of the so-called retail investment, is do the investors understand the assets they've got and the characteristics of those assets because there are clearly some signs of strains in the markets. I think they're often described as idiosyncratic. Okay, every incident will have a different story attached to it. But we are seeing some increase in requests, a quite big increase in requests for outflows to take liquidity out. And I think how that plays out will depend on what investors think they had relative to what they sort of now think they've got.
Just to run through another area where you've got quite a big distinction now between the UK and the US or at least there has been in the proposals you had put forward was for stable coins and the basic approach you'd had towards them. Are you now scrapping the idea of capping the amount of stable coin that individuals and businesses can.
