The Federal Reserve Board on Wednesday eased its restrictions on management interlocks, saying an official may work for two banks within the same community provided at least one institution has less than $20 million in assets.

Currently the Fed only allows officials to work for two banks in the same community if both institutions have less than $20 million in assets.

Also on Wednesday the Fed ruled that the Federal National Mortgage Association can take advantage of certain government guarantees for netting contracts.

These guarantees - which ensure that a party will get paid if the other side defaults - are reserved for banks and securities firms. But the Fed said Fannie Mae's quasi-government status allows it to use the guarantees.

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