NY Fed names MF Global, SocGen as primary dealers
NEW YORK Feb 2 (Reuters) - Two more firms are joining the select group of investment banks and securities dealers that work directly with the U.S. government to help manage monetary policy and sell U.S. debt.
The Federal Reserve Bank of New York announced on Wednesday that MF Global MF.N and Societe Generale (SOGN.PA) have been made primary dealers, bringing the number of firms on the list to 20.
Primary dealers work with the Fed to help carry out monetary policy by trading directly with the New York Fed. But their most visible role is in Treasury auctions. They are required to buy some U.S. debt each time the Treasury Department has an auction. They can then sell the debt in the secondary market.
Officials from the Fed and the Treasury regularly meet with bankers at primary dealers for information about market conditions and trends in demand for U.S. debt.
As a result of the financial crisis, the list of primary dealers has shrunk recently. MF Global and SocGen are the first firms to be granted primary dealer status since the New York Fed tightened application standards last year. There are other primary dealer hopefuls in the pipeline: TD Securities and CRT Capital Group have both begun efforts to become primary dealers. (Reporting by Emily Flitter; Editing by Leslie Adler)