The Defence, Security and Resilience Bank (DSRB) faces significant funding obstacles despite Canadian Prime Minister Mark Carney's backing. According to reports from Reuters, the bank has secured approximately €5 billion in commitments by August but is targeting around €20 billion in paid-in capital and a further €80 billion available when needed. The DSRB aims to raise around €100 billion ($116 billion) to provide low-cost lending to governments and contractors for defence projects, along with guarantees for smaller firms. However, as reported by Reuters, some potential members have cited the upfront capital requirements and concerns about whether the DSRB can offer cheaper financing than highly rated national governments as significant barriers to participation. About a dozen banks, including JPMorgan and Deutsche Bank, have provided around $10 million in funding or services in kind to help establish the DSRB, according to a person with knowledge of the matter. Reuters spoke to eight people with knowledge of the discussions to join the bank, with some citing the ability to offer cheaper financing than highly rated national governments as a stumbling block for potential members.
Germany, Britain and other G7 countries have declined to join the DSRB, raising concerns about achieving the triple-A credit rating needed to secure the lowest funding costs. According to Reuters, five people with knowledge of the talks cited potential overlap with existing financing efforts, including the EU's €150 billion SAFE programme launched in 2025 and Britain's proposed Multilateral Defence Mechanism (MDM) with the Netherlands, Finland and Poland. William Perraudin from Risk Control analytics firm noted that "to make a good impression on the ratings agencies, they would need to have several other substantial governments participating." Some sources also cited concerns about the amount of capital countries would need to commit while public finances are strained, as well as uncertainty over how projects would be selected. Britain has previously declined to join over value-for-money concerns, although officials say Prime Minister Andy Burnham has discussed the DSRB with Carney and Luxembourg's Luc Frieden, and Defence Minister Wes Streeting has described the idea as an innovative mechanism rather than a rival to the UK-led plan. A German finance ministry spokesperson said its position on the DSRB had not changed since July, when it told Reuters it had taken part in DSRB talks as an observer and was reviewing the outcome.
The DSRB has secured support from Canada, Albania, Belgium, Greece, Latvia, Luxembourg, Romania, Turkey and Ukraine. According to Reuters, two officials from countries involved in the project confirmed the bank's current commitments. Larger countries have been asked to contribute around €1 billion each, which can be paid over three years and is expected to return profits through dividends. Canada's finance minister's press secretary John Fragos stated that "we are proceeding at pace, developing Articles of Agreement and working with allies and partners alike to form a group of founding nations." The bank could eventually return profits through dividends, with supporters arguing that even countries already able to borrow cheaply could benefit by giving domestic defence contractors access to the bank's financing. Linus Terhorst of the Royal United Services Institute (RUSI) think tank noted that while big European economies can already borrow cheaply, membership would ensure their domestic contractors can access the DSRB funding.
DSRB founder Rob Murray, speaking at the Farnborough Airshow, emphasized the bank's role in helping countries rearm to counter security threats. As reported by Reuters, Murray stated "we need 10 of them, frankly." The bank aims to provide a more permanent financing institution for defence than existing programmes and can work with any procurement method. Canadian Prime Minister Carney stated at Farnborough that the DSRB would "ensure that Canada and our Allies have the capacity to meet the challenges of a more dangerous and divided world together." Murray noted that "if we do this properly, higher defence expenditure can generate technology, factories, skilled jobs, stronger supply chains and economic growth while simultaneously strengthening deterrence." The DSRB will "ensure that Canada and our Allies have the capacity to meet the challenges of a more dangerous and divided world together," Carney said in July. Perraudin said the DSRB could use financial leverage separate from the balance sheets of already indebted nations to boost defence investment, though to become a significant player, it would need additional sovereign backing beyond current commitments.
The DSRB's charter signing is planned for autumn, with Canada's lead negotiator Isabelle Hudon confirming this timeline. According to Reuters, the bank will be based in Canada and will offer guarantees for lenders financing smaller firms seen as riskier borrowers. The DSRB's approach differs from existing programmes by providing a more permanent financing institution for defence, addressing concerns about upfront capital requirements and project selection uncertainty that have been cited as obstacles for potential members. Canada hopes Britain could reconsider under new Prime Minister Andy Burnham, whose defence minister Wes Streeting has described the DSRB at Farnborough as a "really interesting and innovative mechanism." He also said he did not see the proposed defence bank and MDM as being in competition. The DSRB's launch comes as European countries are increasing defence spending after the Trump administration demanded they take on more of NATO's burden, although few are close to meeting the alliance's latest targets. Carney earlier this year called for an alliance of "middle powers" to respond to what he sees as the fracturing of the U.S.-led world order.
