JPMorgan was selected by the Federal Reserve to serve as custodian for its program to buy MBS.
The program, which started on Jan. 5, will purchase up to $500 billion in MBS that are backed by Fannie Mae, Freddie Mac and Ginnie Mae.
The program's aim, which was originally announced on Nov. 25, is to offer support to mortgage and housing markets as well as to foster improved conditions in financial markets more generally.
Through a competitive process, the Fed selected four investment managers BlackRock Financial Management,Goldman Sachs Asset Management, Pacific Investment Management Co. (PIMCO), and Wellington Management Co. and JPMorgan as custodian to implement the program.
According to a JPMorgan press release, the selection criteria were based on these institutions' operational capacity, size and overall experience in the MBS market.
We are proud to have been selected by the Federal Reserve for this important initiative, said Conrad Kozak, CEO of JPMorgan 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.