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Rishi Sunak will not face a sanction for breaching confidentiality rules around the investigation into his failure to declare his wife’s shares in a childcare company that benefitted from the budget.

Parliament’s standards committee, which scrutinises the behaviour of MPs, found Mr Sunak’s breach of confidentiality rules was “inadvertent”.

Standards commissioner Daniel Greenberg opened an investigation into the prime minister at the end of March following a complaint he failed to declare his wife’s shares in childcare company Koru Kids during a session before the liaison committee.

After a Downing Street spokesperson was reported as saying Mr Sunak would co-operate with the inquiry, it was expanded to examine a potential breach of the rules about confidentiality.

Mr Greenberg found Mr Sunak had broken the confidentiality rules, but noted he co-operated fully and subsequently said that “with hindsight, he would have made arrangements to restrict the disclosure of information by his office on his behalf”.

However, the matter was still referred to the standards committee as a breach was found.

The committee agreed with the findings, but also found that it was inadvertent, writing that no details that were not already public were disclosed, and not all communications from Downing Street would be directly authorised by the prime minister himself.

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US Federal Reserve Banks say stablecoins could ‘become a source of financial instability’




US Federal Reserve Banks say stablecoins could ‘become a source of financial instability’

The Federal Reserve Banks of Boston and New York published a staff report on Sep. 26 comparing stablecoins, such as USDT and USDC, to money market funds. Key findings in the report include the observation that stablecoins and money market funds follow similar patterns during runs and that stablecoins could inject instability into the broader financial system.

The report, titled “Runs and Flights to Safety: Are Stablecoins the New Money Market Funds?” includes a comprehensive comparison of investor behavior during the stablecoin runs of 2022 and 2023 to investor behavior during the money market fund runs of 2008 and 2020.

Per the publication:

“Our findings show that stablecoins are vulnerable to runs during periods of broad crypto market dislocation as well as idiosyncratic stress events. Should stablecoins continue to grow and become more interconnected with key financial markets, such as short-term funding markets, they could become a source of financial instability for the broader financial system.”

The researchers also note that stablecoins appear to have a discrete “break-the-buck” threshold of $0.99, below which redemptions accelerate and runs — periods in which investors flee, potentially causing an asset crash for remaining investors.

A break-the-buck threshold in money market funds occurs when the net asset value of a fund drops below a dollar, this can lead to investor shares, valued at $1.00, to dip below market price and cause investors to seek safe harbor elsewhere.

Image credit: Anadu, et. al., 2023

As Cointelegraph recently reported, Italy’s central bank is also taking measures to identify contributing factors and prevent stablecoin runs. In a recent statement, the Italian banking authority cited the 2022 Terra Luna collapse as an example that stablecoins “have not proved stable at all.”

According to the report, Italy has also called upon global lawmakers to form an international regulatory body to govern cryptocurrency, stablecoins, and related technologies.

Related: ‘It’s going to get worse for banks’ — JPMorgan CEO on overregulation