Ottawa, Canada is pushing ahead with plans to establish a new international financial institution aimed at helping allied countries expand defence capabilities, support security industries and finance strategic infrastructure.

The proposed Defence, Security and Resilience Bank (DSRB) is being developed as governments across Europe and other allied regions face growing pressure to increase defence spending and strengthen domestic production.

Canada wants the institution to eventually mobilise around €100 billion, using its financial resources to provide lower-cost loans and guarantees for governments and defence-related companies.

A Bank Designed for Defence Financing

The proposed institution would operate differently from traditional development banks.

Instead of concentrating primarily on roads, schools, healthcare or general economic development, the DSRB would focus on projects linked to defence, security and national resilience.

Its financing could support military equipment, defence infrastructure, strategic manufacturing capacity and companies considered important to national security.

The initiative reflects a growing recognition among allied governments that defence capability requires not only military personnel and equipment but also reliable industrial and financial systems.

Canada Leads the Initiative

Canadian Prime Minister Mark Carney has emerged as a major supporter of the proposed bank.

Canada is expected to host the institution if the participating countries complete the planned arrangements.

Ottawa believes a dedicated financial mechanism could help smaller countries overcome the high costs associated with modern defence programmes.

The proposal is particularly relevant to European countries that are attempting to increase military spending while facing fiscal constraints.

Nine Countries Have Backed the Plan

Canada and eight other countries have so far pledged support for the initiative.

The countries identified as supporters include:

• Canada
• Albania
• Belgium
• Greece
• Latvia
• Luxembourg
• Romania
• Türkiye
• Ukraine

Their participation provides an initial foundation for the proposed institution.

However, the bank’s long-term credibility will depend heavily on whether larger economies eventually join.

Germany and Britain Have Held Back

Two of Europe’s most important military powers, Germany and the United Kingdom, have not yet committed to the proposed bank.

Their absence is significant because both countries have major defence industries and substantial financial resources.

A larger membership would strengthen the institution’s ability to raise money cheaply.

Without participation from major G7 economies, questions remain about whether the bank can achieve the highest possible credit rating.

The €100 Billion Ambition

The DSRB is seeking to mobilise approximately €100 billion.

The proposed structure includes around €20 billion in paid-in capital, with another €80 billion potentially available when required.

As of August, participating countries had reportedly committed about €5 billion.

That means the institution still has a considerable distance to travel before reaching its proposed financial scale.

Why Defence Financing Is Becoming More Important

Governments across Europe are increasing defence budgets because of the changing international security environment.

The war in Ukraine has demonstrated the enormous quantities of ammunition, drones, air-defence systems and other equipment required during a prolonged conflict.

Countries are therefore trying to expand domestic defence production.

But building new factories and production lines requires substantial investment.

The proposed bank is intended to help fill that financing gap.

Smaller Defence Companies Could Benefit

One of the bank’s proposed functions would be providing guarantees for smaller defence and security companies.

Smaller firms often struggle to obtain commercial financing because defence contracts can involve long development periods and uncertain government procurement schedules.

A government-backed guarantee could reduce the risk for banks and investors.

That could make it easier for smaller companies to expand production or develop new technologies.

Defence Industry Faces Capacity Constraints

The global defence industry has faced significant production challenges in recent years.

Demand for artillery shells, missiles, drones and air-defence systems has increased sharply.

Factories that were designed for peacetime production have struggled to meet wartime-level demand.

Expanding capacity requires new equipment, skilled workers, raw materials and financing.

The DSRB proposal is designed partly around this problem.

Ukraine Could Become a Major Beneficiary

Ukraine is one of the countries supporting the proposed bank.

The country has developed a rapidly expanding defence industry during its war with Russia.

Ukrainian companies have become major producers of drones and other military technologies.

Access to international financing could help Ukrainian defence companies expand production and develop new systems.

The proposed institution could therefore become another mechanism for strengthening Ukraine’s long-term defence-industrial capacity.

The Bank Could Support Defence Infrastructure

Financing would not necessarily be limited to weapons.

Security-related infrastructure could also become an important area of activity.

Potential projects could include military logistics facilities, secure communications networks, strategic transport infrastructure and other assets considered important for national resilience.

This broader approach could make the institution relevant to governments beyond traditional military procurement.

Resilience Is Part of the Name for a Reason

The inclusion of the word “resilience” reflects a broader concept of national security.

Modern conflicts can affect energy networks, telecommunications, supply chains, transport systems and financial infrastructure.

Countries therefore need systems capable of continuing to operate during crises.

A defence bank could potentially finance projects designed to protect critical infrastructure from military attacks, cyber threats and other disruptions.

Cybersecurity Could Become an Area of Investment

Cybersecurity is increasingly viewed as an essential component of national defence.

Government networks, banks, power systems and industrial facilities can all become targets during geopolitical conflicts.

Investment in secure digital infrastructure is therefore becoming a priority for many countries.

The proposed bank could potentially support companies and projects involved in cybersecurity and secure communications.

Energy Security Also Matters

Energy systems are another part of strategic resilience.

Recent conflicts have demonstrated how vulnerable countries can become when they depend heavily on external energy supplies.

Defence and resilience financing could potentially support infrastructure that protects energy networks or improves strategic energy independence.

Such projects could have both civilian and military benefits.

The Bank Would Not Replace Existing Institutions

The DSRB would operate alongside existing international financial institutions.

It would not be intended to replace organisations such as the World Bank or regional development banks.

Instead, its purpose would be to focus specifically on defence and security projects that traditional lenders may not prioritise.

The challenge will be avoiding unnecessary duplication.

Competition With European Programmes

The proposed bank could overlap with existing European defence financing initiatives.

The European Union has already created mechanisms designed to support joint defence procurement and military investment.

The United Kingdom has also been developing separate financing arrangements for defence cooperation.

Supporters of the DSRB argue that an international bank could complement these programmes by providing additional capital.

Triple-A Rating Is Crucial

One of the biggest financial challenges is achieving a triple-A credit rating.

A high credit rating would allow the bank to borrow money at relatively low interest rates.

Those savings could then be passed on through cheaper loans to governments and defence companies.

However, credit-rating agencies will examine the financial strength and commitments of member countries before assigning such a rating.

Why G7 Membership Matters

The participation of major economies would significantly strengthen the bank.

Countries such as Germany and the UK possess large economies, major defence industries and strong financial institutions.

Their participation could increase the bank’s capital base and improve investor confidence.

Without them, the institution may still launch but could face higher borrowing costs.

Banks Are Showing Interest

Major financial institutions are reportedly monitoring the initiative.

JPMorgan and Deutsche Bank are among the banks that have shown support for the broader concept.

Their involvement could help the DSRB develop financing structures and attract private-sector capital.

The participation of commercial banks would also provide additional expertise in evaluating large defence and infrastructure projects.

Private Investors Could Play a Role

The proposed bank is not expected to rely entirely on government money.

Its financial structure could allow private investors and commercial lenders to participate.

Government guarantees could reduce risks and encourage private capital to enter defence-related projects.

This model could substantially increase the amount of money available beyond the initial public contributions.

Defence Startups Need Capital

The defence industry has experienced rapid technological change.

Artificial intelligence, autonomous systems, drones, satellite technology and advanced sensors are becoming increasingly important.

Many companies developing these technologies are relatively young.

Traditional banks may be reluctant to finance them because their products are specialised and their revenue streams can depend heavily on government contracts.

A specialised international financial institution could potentially address this problem.

Europe Wants Greater Defence Independence

The proposal comes amid wider European efforts to strengthen defence capabilities.

European governments have increasingly recognised the need to produce more military equipment within Europe and reduce dependence on external suppliers.

The war in Ukraine has reinforced these concerns.

The DSRB could therefore support the development of a more integrated European and allied defence-industrial base.

Canada Seeks a Larger International Role

For Canada, the initiative also represents an opportunity to strengthen its role in international security.

Ottawa has traditionally been an active member of NATO and other multilateral organisations.

Hosting a new international financial institution would give Canada another avenue for influencing global defence policy.

The proposal also aligns with Canada’s effort to strengthen relationships with European allies.

Concerns About Duplication

Not everyone is convinced that another defence financing institution is necessary.

Critics could argue that existing national, NATO and EU programmes already provide multiple mechanisms for defence investment.

Creating another institution could produce overlapping responsibilities.

The bank will therefore need a clearly defined mission if it is to attract broad support.

Governance Will Be Important

Another major question concerns how projects will be selected.

Defence spending involves sensitive information and national-security considerations.

The bank will need transparent financial procedures while protecting classified information.

Members will also have to agree on how much influence individual countries receive over investment decisions.

Financing Must Be Sustainable

A large capital target does not automatically guarantee success.

The institution will need to maintain strong financial discipline.

Loans must be repaid, guarantees must be managed and investment decisions must be carefully evaluated.

If major projects fail financially, member governments could face pressure to provide additional capital.

Autumn Could Bring a Major Decision

Participating countries are expected to continue negotiations ahead of a possible charter signing in the autumn.

The coming weeks will therefore be important for determining whether the proposal can move from political concept to functioning financial institution.

Additional countries may join before the final agreement.

A New Era of Defence Economics

The DSRB proposal reflects a broader change in how governments think about national security.

Defence is no longer viewed only as a question of military budgets.

Industrial capacity, financial markets, technology, energy systems and supply chains are increasingly considered parts of national resilience.

A dedicated defence bank would institutionalise that approach.

What Happens Next

Several issues will determine the bank’s future:

• Whether Germany and Britain decide to participate
• How much capital founding members contribute
• Whether the institution can achieve a triple-A rating
• Which defence projects qualify for financing
• How private investors participate
• How the bank avoids duplicating existing programmes
• Whether additional countries join before the charter is signed

Each of these questions will influence the bank’s credibility.

A Potentially Powerful New Financial Institution

If successfully established, the DSRB could become an important source of financing for defence and security projects.

It could provide smaller countries with access to capital that would otherwise be difficult to obtain.

It could also help defence companies expand production at a time when governments are seeking greater industrial capacity.

But its success will depend heavily on broad international participation.

Conclusion

Canada is leading an ambitious effort to create a new Defence, Security and Resilience Bank, with a long-term goal of mobilising approximately €100 billion for defence-related lending and guarantees.

Nine countries have so far supported the initiative, but the absence of major economies such as Germany and the United Kingdom remains a significant challenge.

The proposed institution reflects a changing global security environment in which military strength increasingly depends on industrial production, financial capacity, technology and resilient infrastructure.

If Canada succeeds in attracting broader backing, the DSRB could become an important new pillar of allied defence financing. If major economies remain outside the project, however, its ability to achieve the scale and credit strength envisioned by its founders could remain limited.