J.P. Morgan has been selected by the Federal Reserve to serve as custodian for its program to purchase mortgage-backed securities (MBS). The program, which began Jan. 5, will purchase up to $500 billion in MBS that are backed by Fannie Mae, Freddie Mac and Ginnie Mae. The goal of the program, which was originally announced Nov. 25, 2008, is to provide support to mortgage and housing markets and to foster improved conditions in financial markets more generally.
Via a competitive process, the Federal Reserve selected four investment managers – BlackRock Financial Management Inc., Goldman Sachs Asset Management, LP, Pacific Investment Management Co. LLC (PIMCO) and Wellington Management Co. 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.
"We are proud to have been selected by the Federal Reserve for this important initiative," says 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."
SOURCE: J.P. Morgan