Money Talk: Fed closely monitoring liquidity in global financial markets following Brexit vote

Editor’s note: Each Monday, Talk Business & Politics provides “Money Talk,” a wrap-up of banking and financial news.

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FED CLOSELY MONITORING LIQUIDITY IN GLOBAL FINANCIAL MARKETS FOLLOWING BREXIT VOTE
After the close of international financial exchanges on Friday, the Federal Reserve issued a statement saying it is carefully monitoring developments in global financial markets, in cooperation with other central banks, following the results of the Brexit vote. The Federal Reserve said it is prepared to provide dollar liquidity through its existing swap lines with central banks, as necessary, to address pressures in global funding markets, which could have adverse implications for the U.S. economy.

SEC: MERRILL LYNCH TO PAY $415 MILLION FOR MISUSING CUSTOMER CASH
The Securities and Exchange Commission recently announced that Merrill Lynch has agreed to pay $415 million and admit wrongdoing to settle charges that it misused customer cash to generate profits for the firm and failed to safeguard customer securities from the claims of its creditors. An SEC investigation found that Merrill Lynch violated the SEC’s Customer Protection Rule by misusing customer cash that rightfully should have been deposited in a reserve account.

Merrill Lynch, which is now the corporate and investment arm of Bank of America, engaged in complex options trades that lacked economic substance and artificially reduced the required deposit of customer cash in the reserve account. The maneuver freed up billions of dollars per week from 2009 to 2012 that Merrill Lynch used to finance its own trading activities. Had Merrill Lynch failed in the midst of these trades, the firm’s customers would have been exposed to a massive shortfall in the reserve account, the SEC said.

DEBATE ON ‘PAPER VERSUS PAPERLESS’ STATEMENT GROWS
More than 93 million credit card holders are still receiving financial statements through the mail, according to a new CreditCards.com report. That includes 43 million who prefer to only receive and review their monthly financial statements on paper. Amongst those who are receiving monthly financial statements in the mail, nearly 50% said that they wouldn’t mind paying for the paper statements, if required.

The new report comes amid a growing debate on whether the financial and utility industries’ push to cut costs by getting consumers to switch to electronic statements is hurting poor, minority and elderly customers who don’t have access to broadband internet.

A 2015 study of a major utility conducted for the inspector general of the United States Postal Service found that while most customers prefer to pay bills online, they overwhelmingly prefer to receive their bills in the mail, both as a reminder to pay and as a preferred format for record keeping.