November 12, 2014 / 4:02 PM / 5 years ago

N.Y. Fed accepts applications to expand reverse repo participants

NEW YORK (Reuters) - The New York Federal Reserve said on Wednesday it is accepting applications from firms to participate in the U.S. central bank’s fixed-rate reverse repurchase agreement program, which is a critical tool to control short-term interest rates when it decides tighten policy.

Right now, there are 140 reverse repo counterparties, including 94 of the largest money market funds, six government-sponsored enterprises (Fannie Mae, Freddie Mac, and four Federal Home Loan Banks), 18 banks, and 22 primary dealers that are the top Wall Street firms that do business directly with the Fed.

This last wave of expanded RRP counterparties will likely be added in first quarter of 2015, the New York Fed in a statement.

It added that currently it doesn’t expect raising total number of expanded counterparties after those added from this last wave of applications.

Reporting by Richard Leong; Editing by Jeffrey Benkoe

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