Describes the increasing scale and scope of open market operations as the Open Market Desk at the New York Reserve Bank sought to moderate fluctuations in the Federal funds rate attributable to bank reserves management practices. Innovations in System repo operations included relaxation of the maturity limit on repo collateral, introduction of back-to-back repos (where the Desk financed repo collateral that primary dealers sourced from their customers), introduction of repos on federal agency debt, and the development of matched sale-purchase agreements to drain transient increases in reserves.