# credit risk

Bank of England to Model an 'AI Shock' and Weigh It in Bank Stress Tests

The Bank of England will run a scenario exercise to assess how a rapid, disruptive wave of AI adoption could trigger widespread unemployment and business failures and is considering including the findings in bank stress tests. The exercise aims to quantify credit and capital risks from a potential surge in household and corporate defaults, while forcing banks and regulators to confront difficult modelling and policy choices.