On Monday, May 22, the Federal Reserve Bank of New York added 32 new money market funds in addition to the existing set of Primary Dealer counterparties. The Federal Reserve can conduct reverse repurchase agreements with the counterparties, and can eventually tap into and drain cash from the financial system.

Effective Monday, May 23, 2011, the New York Fed accepted these money market funds as reverse repurchase transaction counterparties.

The new funds include the Federated Capital Reserves Fund, BofA Treasury Reserves, and the JPMorgan Liquid Assets Money Market Fund.

The full list of the new funds as well as the existing funds can be found at the Federal Reserve Bank of New York website.

The 32 new money market funds:

Investment ManagerFund Name
BlackRock Institutional Management CorpBlackRock Liquidity Funds: T-Fund
BlackRock Liquidity Funds: TempCash
BofA Advisors, LLCBofA Treasury Reserves
The Dreyfus CorporationDreyfus Cash Management Plus
Dreyfus Institutional Reserves Money Fund
Federated Investment Management CompanyFederated Capital Reserves Fund
Federated Prime Value Obligations Fund
Fidelity Management & Research CompanyFidelity Fixed Income Trust: Money Market Portfolio
Invesco Advisers, Inc.STIT Government and Agency Portfolio
J. P. Morgan Investment Management Inc.JPMorgan Liquid Assets Money Market Fund
Morgan Stanley Investment Management, Inc.Morgan Stanley Institutional Liquidity Fund Government Portfolio
Northern Trust Investments, Inc.Northern Institutional Funds - Diversified Assets Portfolio
Northern Institutional Funds - Government Portfolio
Northern Institutional Funds - Government Select Portfolio
Northern Funds - Money Market Fund
Prudential Investments LLCPrudential Investment Portfolios 2 - Prudential Core Taxable Money Market Fund
SSgA Funds Management, Inc.Institutional Liquid Reserve Portfolio
SSgA Money Market Fund
SSgA Prime Money Market Fund
State Street Navigator Securities Lending Trust
T. Rowe Price Associates, Inc.T. Rowe Price Prime Reserve Fund
T. Rowe Price Summit Cash Reserves Fund
TDAM USA, Inc.TDAM Money Market Portfolio
UBS Global Asset Management (Americas) Inc.Prime Master Fund
Treasury Master Fund
UBS RMA Money Market Portfolio
U.S. Bancorp Asset Management, Inc.First American Treasury Obligations Fund
Mount Vernon Securities Lending Prime Portfolio
The Vanguard Group, Inc.Vanguard Federal Money Market Fund
Wells Fargo Funds ManagementWells Fargo Advantage Money Market Fund
Wells Fargo Advantage Prime Investment Money Market Fund
Wells Fargo Advantage Treasury Plus Money Market Fund

The Fed can use reverse repos as one of the means to tighten monetary policy if needed.

In a reverse repo, financial firms would buy securities for a certain period to drain excess reserves from the financial system.

Federal reserve Morgan Stanley U.S. Bancorp Wells fargo