ECB’s Lagarde says AI could trigger financial crises and calls for Cold War-style non-proliferation governance

ECB President Christine Lagarde warned on Wednesday that artificial intelligence could trigger dangerous financial crises and called for global AI governance modelled on the Cold War-era non-proliferation agreements that kept the world safe from nuclear weapons. She spoke in Venice, the sharpest framing yet from a central bank chief on the systemic risks AI poses to the financial system.

“In recent history, there is one force that has destroyed more jobs and wiped out more savings than technology ever has, and that force is financial crises,” Lagarde said. “As these systems become more powerful, they are expanding further and further into the economy.”

The ECB has already subjected 109 banks to a severe AI-powered cyberattack scenario. Most weaknesses identified have been addressed. Lagarde said she will now write directly to bank CEOs to ensure they are prepared for AI attacks and understand that resilience will require serious investment.

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“AI is set to reshape the financial sector from within, creating new concentrations of risk and new openings for those who would do harm,” she said.

The non-proliferation comparison is deliberate and unprecedented from a sitting ECB president. Nuclear treaties worked because they created a shared framework between adversaries. Lagarde is arguing that AI’s potential to destabilise the financial system requires the same level of coordinated international response, something neither the G7 nor any existing institution currently provides.

Her comments follow IMF Managing Director Kristalina Georgieva’s warning last week that Mythos-class AI “can be used to destroy the financial system.” The ECB has already told eurozone banks to tighten cybersecurity in response to AI-led attack tools. The Financial Stability Board has called for stronger safeguards. But Lagarde’s Venice speech goes further than any previous statement by arguing the primary risk is not the technology itself but the financial instability it can catalyse.

“We cannot stop artificial intelligence, even with our sound regulations,” she said. “What we can do, however, is prepare ourselves.” She called for a European capital markets union and careful oversight to ensure that “this technological revolution does not become a financial crisis.” Europe’s struggle to access Anthropic’s Mythos underscores how far the continent is from the governance framework Lagarde is demanding. The tools exist. The treaties do not.