Washington - The Federal Reserve Board of New York urged the U.S. Supreme Court to avoid defining the nature of a repurchase agreement, saying an overly broad interpretation could hurt the liquidity of this huge market.

The New York Fed's comments were made in a brief filed this week in Nebraska v. Loewenstein, which will be decided in the court's next term, which begins Oct. 3. The case involves Nebraska's taxation of income earned by John Loewenstein from his shares in mutual funds that invest in U.S. securities through repurchase agreements.

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