Fed posts reverse repo contract for money market funds

NEW YORK, April 30 (BestGrowthStock) – The Federal Reserve Bank of
New York has moved a step closer to testing reverse repurchase
agreements, a key element of the Fed’s plan to drain excess
liquidity from the financial system.

The New York Fed on Friday posted on its website a master
agreement it will use with money market funds to engage in
reverse repos. The contract details the steps the New York Fed
and money market fund counterparties will have to take to enter
into a reverse repo agreement. Such an agreement would lock up
cash at the Fed for a predetermined amount of time.

Reverse repos are one of several tools the Fed plans to use
to drain excess cash from the financial system now that the
financial crisis has subsided.

Stock Analysis
(Reporting by Emily Flitter; Editing by Dan Grebler)

Fed posts reverse repo contract for money market funds