The Federal Reserve Bank of New York (NY Fed) is seeking to expand its counterparties for reverse repo operations to include government-sponsored enterprises (GSEs), The Wall Street Journal reports. GSEs, such as Fannie Mae and Freddie Mac, are required to send their applications by June 3.

The move is aimed at smoothening the central bank’s reverse-repo operations when the time comes to start withdrawing the cash infused into the economy due to the financial crisis. The Fed has already carried out some tests on reverse repos and has expanded the number of money-market funds as eligible counterparties in addition to the 20 primary dealers that trade directly with the Fed.

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