The Bank of England warned Wednesday that the ongoing U.S. conflict with Iran could cause already-existing weaknesses in the financial system to bubble over, heightening fears around the risks that private credit and artificial intelligence stocks pose to stability.

Policymakers at the Bank identified weaknesses in private credit markets, highly priced U.S. tech stocks, and hedge fund activity in the sovereign bond market as key concerns that had lingered in the financial system before the war began — and said they could erupt at once as a result of supply chain disruption from the war.

“A substantial negative supply shock leading to tighter financing conditions increased the likelihood of these vulnerabilities crystallising at the same time, potentially amplifying their combined impacts on financial stability,” said the Bank’s Financial Policy Committee in a record of its latest meeting, published Wednesday.

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