The U.S. Federal Reserve is contemplating accessing money market funds through clearing banks or the creation of a facility to drain cash added to the financial system, Bloomberg said, citing people familiar with the plans.
With the Fed looking to remove some of the more than $1 trillion that was pumped into the U.S. economy, the methods under consideration could help conserve the capital of the 18 primary dealers that act as counterparties for open market transactions, the people told the news agency.
Talks on how to access a broader array of counterparties other than primary dealers are still developing, one of the people told the news agency.
The Federal Reserve did not immediately reply to a Reuters email seeking comment that was sent outside of regular U.S. business hours.
(Reporting by Ajay Kamalakaran in Bangalore; Editing by Kim Coghill)