BMO Financial Group Inc., one of the biggest players in the U.S. mortgage industry, is launching a $50 billion investment fund with the goal of developing a global bank that would offer better products, faster services and better governance than its current unit.
The bank plans to create the fund in collaboration with Morgan Stanley, which is the biggest investment bank in the world and has invested in many large U.K. banks, including BMO.
Morgan Stanley and BMO are investing in the new fund, according to people familiar with the matter.
Morgan Stanley, based in London, is a major player in the mortgage finance industry.
The new bank, to be known as BMO Asset Management, would be one of several funds created by the Bank of Canada that are focused on creating a banking network with the ability to offer the widest range of services to Canadians and global markets.
BMO has been the biggest player in Canada’s mortgage lending industry for years, but the company has been struggling with the high costs and low returns for investors who want to take on bigger and more risky loans.
BMO is expected to announce its new investment fund at the Bank for International Settlements, a body that regulates international banks.
The U.N. Bankers’ Association on Tuesday said it expects BMO to announce a $30 billion investment by the end of 2019.
“BMO Asset management is the most ambitious bank that we have seen in the last decade and it will offer more and better services to the Canadian financial sector,” said Peter Dejong, the association’s director general.
A $50-billion investment fund would be the biggest bank in Canada to launch a new fund.
While BMO may be the largest bank in its sector, it has been among the biggest in the global economy for years.
BNY Mellon Inc. has the largest U.s. market cap in the banking industry, at $5.5 trillion, and is the only bank to have $1 trillion in U.ks. assets under management.
It is part of BMO’s larger U.k. business, and it owns the Royal Bank of Scotland.
Bancorp Inc., which owns BMO, also has a large U,ks.
portfolio and holds assets valued at $4.5 billion.
There are also concerns about BMO being too big to fail.
If it fails, investors would lose more than $400 billion of assets, according a survey by Morgan Stanley’s global financial services unit.
Investors have also raised concerns that BMO could have a negative impact on U.KS. government debt and on the economy.
Bmo has been working with the Uks.
government on a bailout package for the financial services industry that could cost as much as $5 billion, according the survey.
In a statement, BMO said the bank is “working closely with the government of Canada to explore the opportunities that lie ahead in the coming months.”
Banks in the United Kingdom are facing increased pressure to raise capital.
Last week, the Royal United Services Institute, a business lobby group, warned that Britain’s economy would be in trouble if BMO fails.
David Hogg, an RUSI executive, said BMO and the UK. government should be able to agree on a package that is “cost-effective and fair.”
In April, a new U. k. government proposal to raise more than a billion pounds ($7.7 billion) in emergency aid for financial firms was rejected by the UKS government.
On Tuesday, the British Parliament approved a package of $1.2 billion in emergency measures, including a proposal to impose a 10 per cent tax on any bank holding more than 1 per cent of the country’s assets.
U.K.-based Barclays Plc, which owns British bank Barclays, has said it would continue to pursue a U. s. bailout.
British Prime Minister David Cameron is pushing the Ubs to provide more cash for the country to fund its debt-laden banks, but some British bankers fear the package could create a domino effect that could lead to the country being forced to bail out other banks that are too big for the Uls.