Select2.js with ko custom binding Not Working

HTML

<script src="//cdnjs.cloudflare.com/ajax/libs/select2/3.3.2/select2.min.js"></script>
<script src="//cdnjs.cloudflare.com/ajax/libs/knockout/2.2.1/knockout-min.js"></script>
This Works:
<select id="jQuery" data-bind="options: options, optionsText: 'optionsText', optionsValue:'optionsValue'"></select>
<br/>
This Doesn't Work:
<select id="KOCustom" data-bind="select2: options, optionsText: 'optionsText', optionsValue:'optionsValue'"></select>

CSS

/*
Version: @@ver@@ Timestamp: @@timestamp@@
*/
 .select2-container {
    position: relative;
    display: inline-block;
    /* inline-block for ie7 */
    zoom: 1;
    *display: inline;
    vertical-align: middle;
}
.select2-container, .select2-drop, .select2-search, .select2-search input {
    /*
    Force border-box so that % widths fit the parent
    container without overlap because of margin/padding.

    More Info : http://www.quirksmode.org/css/box.html
  */
    -webkit-box-sizing: border-box;
    /* webkit */
    -khtml-box-sizing: border-box;
    /* konqueror */
    -moz-box-sizing: border-box;
    /* firefox */
    -ms-box-sizing: border-box;
    /* ie */
    box-sizing: border-box;
    /* css3 */
}
.select2-container .select2-choice {
    display: block;
    height: 26px;
    padding: 0 0 0 8px;
    overflow: hidden;
    position: relative;
    border: 1px solid #aaa;
    white-space: nowrap;
    line-height: 26px;
    color: #444;
    text-decoration: none;
    -webkit-border-radius: 4px;
    -moz-border-radius: 4px;
    border-radius: 4px;
    -webkit-background-clip: padding-box;
    -moz-background-clip: padding;
    background-clip: padding-box;
    -webkit-touch-callout: none;
    -webkit-user-select: none;
    -khtml-user-select: none;
    -moz-user-select: none;
    -ms-user-select: none;
    user-select: none;
    background-color: #fff;
    background-image: -webkit-gradient(linear, left bottom, left top, color-stop(0, #eeeeee), color-stop(0.5, white));
    background-image: -webkit-linear-gradient(center bottom, #eeeeee 0%, white 50%);
    background-image: -moz-linear-gradient(center bottom, #eeeeee 0%, white 50%);
    background-image: -o-linear-gradient(bottom, #eeeeee 0%, #ffffff 50%);
    background-image: -ms-linear-gradient(top, #ffffff 0%, #eeeeee 50%);
    filter: progid:DXImageTransform.Microsoft.gradient(startColorstr='#ffffff', endColorstr='#eeeeee', GradientType=0);
    background-image: linear-gradient(top, #ffffff 0%, #eeeeee...

JavaScript

$(function () {
    var vm = new viewModel();
    ko.applyBindings(vm);
    $("#jQuery").select2();
});
ko.bindingHandlers.select2 = {
    init: function (element){
        ko.bindingHandlers.options.init(element);
    },
    update: function (element, valueAccessor, allBindingsAccessor) {
        ko.bindingHandlers.options.update(element, valueAccessor, allBindingsAccessor);
        //$(element).select2();
    }
};

function viewModel() {
    var self = this;
    self.options = ko.observableArray(
    [{
        optionsValue: 1,
        optionsText: "One"
    }, {
        optionsValue: 2,
        optionsText: "two"
    }, {
        optionsValue: 3,
        optionsText: "three"
    }]);
}