Article: Fed to trade currency via nonbanks. (Federal Reserve Bank of New York to use investment banks for foreign exchange transactions)

The Federal Reserve Bank of New York said Friday that it will conduct foreign exchange trades with securities broker-dealers, creating inroads into a domain of commercial banks.

Speaking in Phoenix to the Public Securities Association, a securities industry trade group, E. Gerald Corrigan, president of the New York Fed, linked the new arrangement to a previously announced change in policy aimed at boosting the ranks of primary dealers in government securities.

Both plans are designed to increase the number of participants in key markets.

"I think the central bank is out to get as much market access as possible," said Richard Mahoney, a managing ...

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