For example, some banks are increasingly using AI techniques, such as Natural Language Processing, to identify contractual obligations where Libor is involved. We ourselves have recently deployed an AI tool that can support PRA supervisory judgement with efficient analysis and extraction of unstructured firm intelligence. 8  https://www.bankofengland.co.uk/speech/2021/april/gareth-ramsay-webinar-hosted-by-the-edm-council https://www.bankofengland.co.uk/paper/2020/open-data-for-sme-finance 10 https://www.bankofengland.co.uk/news/2021/february/data-collection-transformation-plan 11 https://www.gov.uk/government/publications/cdei-ai-barometer 12 https://www.bankofengland.co.uk/quarterly-bulletin/2020/2020-q4/the-impact-of-covid-on-machine-learning-and-data-science-in-ukbanking 9  4  All speeches are available online at www.bankofengland.co.uk/news/speeches and @BoE_PressOffice  4  But the rapid pace of adoption also means this is a pivotal moment for the UK to consider how best to support firms’ safe adoption of AI and what that means for the relevant regulatory frameworks. To inform our decisions about regulatory frameworks we’ve been engaging with fintech firms, other financial services firms and authorities, in particular through the AI Public-Private Forum (AIPPF). This year-long initiative, cochaired with the FCA, brings together a diverse group of experts to discuss the key issues related to data, model risk management and governance.13 This includes examining how existing policy frameworks affect and encompass AI, and what the appropriate level of any future potential policy should be. So far, the AIPPF has explored the key data-related issues, such as: 1. the use of ‘alternative data’;  2. how to adapt existing data quality standards to an AI context;  3. fair and equal access to third party data (including pricing);  4. ways to address bias and the challenges of operationalising ethical principles; and  5. approaches to data and AI governance.

In consequence, other banks struggled to get the liquidity they needed via market mechanisms, particularly term borrowing, even when there was more than sufficient cash in the system as a whole and even if the firms had good quality collateral. The amounts being rolled in overnight markets became a risk in itself. The Bank responded by massively increasing its lending at three months maturity from £ before the crisis to a peak of around £ in early 2009. Essentially we chose to lend so that any bank which needed to could bid for and obtain liquidity at three months. The significant increase in term liquidity that ensued meant that there would have been downwards pressure on short-term interest rates. So in order to keep market interest rates close to Bank Rate, the Bank drained the excess liquidity via issuing Bank of England bills. At its peak, the Bank issued around £ of one-week bills. 6  Currently, the deposit rate is zero and the borrowing rate 75bps. In more normal conditions, these spreads can be expected to be symmetric around Bank Rate. 7  The Bank can choose to lend in variable rate repos. This happened for a brief period in mid-2009. 8  Again, variable rate bills could be used. This happened during the first few months of the asset purchase programme.