J.P. Morgan became a custodian of Federal Reserve for its MBS program

Federal Reserve has finally announced the name of the custodian selected for its Mortgage-Backed Securities Purchase Program (MBS). Via a competitive process, the Federal Reserve selected four investment managers – BlackRock Financial Management, Inc., Goldman Sachs Asset Management, L.P., Pacific Investment Management Company LLC (PIMCO), and Wellington Management Company, LLP – and a custodian – J.P. Morgan – to implement the program. The selection criteria were based on each institution’s operational capacity, size and overall experience in the MBS market.. The selection criteria were based on each institution’s operational capacity, size and overall experience in the MBS market.

Under its MBS program which has been launched January 5, 2009 Federal Reserve is to acquire up to $500 billion in MBS backed by Fannie Mae, Freddie Mac and Ginnie Mae. The goal of the program, which was originally announced on November 25, 2008, is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally. 

“We are proud to have been selected by the Federal Reserve for this important initiative,” said Conrad Kozak, CEO of J.P. Morgan Worldwide Securities Services. “We are pleased to be able to support the efficient operation of the MBS program, while at the same time minimizing operational and financial risks.”