▲ Canadian Prime Minister Mark Carney
Eight countries, including Ukraine, have expressed their intention to join the Defence, Security and Resilience Bank (DSRB), a new multilateral financial institution spearheaded by Canada.
The office of Canadian Prime Minister Mark Carney announced in a statement on July 7 (local time) that nine countries, including Canada, Albania, Belgium, Greece, Latvia, Luxembourg, Romania, Turkey, and Ukraine, have agreed to support the establishment of the DSRB.
The announcement was made in line with the schedule of the North Atlantic Treaty Organization (NATO) summit held in Ankara, Turkey.
The DSRB is a multilateral financial institution designed to raise and manage private capital to support global defense investments and strengthen collective security.
Its core purpose is to provide long-term, low-cost funding for defense, security, and supply chain resilience by leveraging a strong credit rating based on the sovereign credit ratings of participating nations.
The DSRB can provide payment guarantees to commercial banks that fund defense contractors or offer direct loans for projects essential to national security.
The model is similar to that of the World Bank or the more recent Asian Infrastructure Investment Bank (AIIB).
The DSRB, sometimes referred to as the "Bomb Bank," aims to launch in 2027.
The Wall Street Journal (WSJ) reported that while governments have embarked on unprecedented levels of military buildup, equipment manufacturers are still struggling with funding shortages, prompting the push for a World Bank dedicated to military equipment to bridge this gap.
Proponents of the bank argue that a dedicated financial institution is necessary because other multilateral banks have largely avoided providing funding to the defense sector.
Over the past several years, the defense industry has become a sector that major banks are reluctant to lend to, much like the tobacco or pornography industries, due to strict ethical standards and public opposition.
The plan to establish the DSRB gained momentum after NATO member states pledged last year to spend 5% of their gross domestic product (GDP) on defense and security.
However, member states are still facing difficulties in utilizing these funds for purposes such as weapons production.
Prime Minister Carney, a former Governor of the Bank of England, argues that "middle powers" must unite to expand their geopolitical influence.
Carney hosted meetings this spring to draft the charter for the DSRB.
Rob Murray, NATO’s head of innovation, who conceived the DSRB in 2018 and has recently led negotiations among relevant countries, pointed out, "The challenge is no longer just about securing more defense spending. The key is to build a financial system that can translate political commitments into factories, production lines, and military power."
He added, "Finance is not just an economic issue; it is part of deterrence, because adversaries will be intimidated by our robust supply and production capabilities."
Countries pushing for the establishment of the DSRB expect that major military powers with abundant capital, such as the United States and Germany, will eventually participate in the bank.
One official stated, "Since we have already secured a sufficient foundation for participation, it is important to provide opportunities for all countries to join."
Previously, a Canadian official stated in an interview with Reuters that South Korea might also join, noting that they have "had productive conversations with South Korea."
However, some point out that coordination is needed as separate efforts to secure funding for defense spending are underway within Europe.
The day before, four countries—the United Kingdom, the Netherlands, Finland, and Poland—also announced that they are pursuing the 'Multilateral Defense Mechanism' (MDM), a funding model for defense spending with a target launch in 2027, and have made significant progress.
Opinions are emerging that the Canada-led DSRB and the Europe-centered MDM should be linked or integrated to increase capital efficiency.
Bloomberg reported, citing sources, that some British officials hope the MDM and DSRB will cooperate or merge.
(Photo: AP, Yonhap News)
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