Fed to Add Government-Sponsored Entities as Counterparties

The Federal Reserve Bank of New York is seeking to expand its counterparties to include government-sponsored enterprises for use when policy makers begin to drain the record amount of cash they added to the financial system.

Government-sponsored enterprises such as Fannie Mae and Freddie Mac must apply to the New York Fed by June 3 for the designation. If they’re approved, that will expand the central bank’s counterparties for reverse-repurchase, or repo, operations from the Fed’s primary dealers and domestic money funds, which were added last year.