The Bank of New York Mellon has been selected as the lead contractor in the government’s efforts to buy up toxic securities that have spawned fear in the financial markets, a mammoth task considered a key to the Treasury Department’s plan to restart the nation’s credit markets.

Under the contract announced yesterday, the bank will run the auctions used by the government to acquire the assets, including many linked to troubled mortgages. Bank of New York Mellon will then hold, track and value those securities.

A firm with a conservative business reputation and historic ties to the U.S. government, the bank is the custodian for $23 trillion in investments and has a lot of experience in financial auctions. Those attributes make it well-suited to the complex task it faces in the rescue plan, financial analysts said.

The contract award comes just a day after the Treasury Department compelled the Bank of New York Mellon to take a $2 billion infusion of federal cash in exchange for preferred stock. Eight other major banks were similarly strong-armed into joining the program.

Let me see, the bailout will be run by a group of people that owe their very existence to the government?  Sounds like a plan.  A bad plan, but at least they have a plan (sarcasm intended).