On November 12, 2014 the Federal Reserve Bank of New York issued a press release indicating that it is seeking additional counterparties for its repo operations. They did not change the eligibility criteria so any new counterparty would need to be:

  • a bank with total assets of no less than $30 billion or have reserve balances of no less than $10 billion;
  • be a government –sponsored enterprise chartered by the U.S. Congress; or
  • be a money market mutual fund with at least $5 billion in assets for the most recent six consecutive months.

Applications are due November 24, 2014 (with Part II of the Application due December 8, 2014 for money market funds). The release noted that the Fed does not anticipate increasing the number of counterparties after those added from this application period. A full list of the eligibility criteria can be found here.

Separately, the rates of the Fed’s repo program will be increasing from 3 basis points to 7 basis points from November 17th to November 28th. This move in rates is consistent with the Fed’s release in late October of the following rate structure:

Date Operation Conducted Offering Rate
October 30 to October 31 5 basis points
November 3 to November 14 3 basis points
November 17 to November 28 7 basis points
December 1 to December 12 10 basis points
December 15 and after 5 basis points

Read the full press release.

Good Day. DR2