Polymarket bank failure predictions could force UK intervention

Michael Hassall Published 06/10/2026

Crypto-based prediction market Polymarket has drawn the ire of the United Kingdom’s (UK) establishment after several markets emerged predicting the downfall of British high street banks HSBC and Lloyds Banking Group.

The prediction market, which also has markets tracking the downfall of the likes of JP Morgan, US Bank, and BNP Paribas, also included markets predicting the failure of several UK banking institutions.

The markets, mainly “Which banks will fail by the end of 2026?” currently hold a very low percentage of “Yes” positions, but still thousands of users are predicting the failure of some of the world’s largest financial providers.

As a result of these markets, UK institutions, such as the Financial Conduct Authority (FCA) have reportedly attempted to insist that governments intervene to prevent potential manipulation of the financial markets.

This market is causing international concern. Image credit: Polymarket/Win.gg

Polymarket is banking on financial institutional failure and UK regulators aren’t happy

The predictions, which are seemingly not backed by any significant evidence that there are issues within the banks, are said to be part of a growing wave of insider trading and market manipulation which prediction market sites seemingly offer a chance for ‘regular joes’ to take part in any potential rush.

Banks, which have already raised alarms about the potential for social media to manipulate markets and cause bank rushes, are now heralding the arrival of prediction market manipulation as another threat to their stability.

The UK Treasury Committee joined the FCA in attempting to encourage authorities to intervene to prevent any potential manipulation or bank run. In comments shared by Guardian article, Liberal Democrat MP and Treasury Committee member Bobby Dean explained many of the concerns:

“Polymarket has a poor reputation for stopping insider trading or bad actors placing bets on their platform, so it’s easy to see how it could be exploited to try to aggravate real shifts in market sentiment. I would urge our regulators to get in contact with their counterparts in the US to raise concerns. We should not turn a blind eye to the risks because they are relatively small today, we’ve all seen how quickly things can move in this sector.”

Bank runs, when large numbers of customers attempt to withdraw their money, can cause issues because banks usually do not maintain enough liquid assets to be able to deliver all customer’s money. The resultant crisis can in extreme cases cause banks to fail.

Earlier this year, Lloyds Group fueled rumours of internal issues thanks to the phasing out of its Halifax brand, which had existed for over 173 years. While publicly the bank maintains the line that this as a portfolio simplification and streamlining process, some customers have lost confidence with the dissolution of their bank. This new wave of failure predictions compound those issues.

Late last month, Polymarket faced legal action from the New York state in the US as regulators accused them of facilitating illegal gambling. ”

Featured Image Credit: Polymarket

Michael Hassall

About Michael Hassall

Michael is a eight-year veteran of the games writing space, but has being playing them for as long as he can remember. With bylines across the internet, he’s used his expertise to cover esports, prediction markets, mainstream gaming, streamers, and more besides.

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