Yesterday, the U.S. Treasury Department announced that it had selected the Bank of New York Mellon to serve as its custodian for the implementation of the Troubled Assets Relief Program (TARP) authorized under the Emergency Economic Stabilization Act (EESA), pursuant to its financial agent selection authority under EESA. Under the financial agency agreement entered into between the two parties, Bank of New York Mellon agrees to provide the custodial, accounting, auction management and other infrastructure services needed by Treasury to administer the complex portfolio of troubled assets that it will purchase, including: accounting of record for the portfolio; holding all cash and assets in the portfolio; pricing and valuing assets; tracking unique asset attributes as required by EESA, such as linkages to executive compensation limits and to warrants received from selling institutions; and supporting the acquisition of securitized assets by serving as auction manager and conducting reverse auctions for the trouble assets. The initial term of the agreement lasts for three years, set to expire October 14, 2011, though Treasury reserves the right to extend the term of the agreement beyond the initial expiration date for a total of four consecutive one-year extensions. Compensation terms were not made publicly available.