Canada aims to launch global defence bank with 10 founding nations

Canada is hoping to unveil around 10 founding member countries for a proposed global defence bank at next week's NATO summit in Türkiye, as Ottawa pushes forward with an initiative aimed at strengthening allied defence capabilities through cheaper and more accessible financing.

The proposed Defence, Security and Resilience Bank (DSRB) is a key part of Prime Minister Mark Carney’s vision for closer cooperation among what he has described as “middle powers” in response to growing geopolitical uncertainty and what he views as a fragmentation of the traditional U.S.-led international order.

Speaking to Reuters, Isabelle Hudon, Canada’s lead negotiator for the project and chief executive of the Business Development Bank of Canada, said the government had set the NATO summit as a target date for announcing the bank’s initial membership.

“We gave ourselves the NATO summit as a deadline,” Hudon said, adding that Canada hopes to reveal a list of founding members, although final participation remains subject to ongoing negotiations.

The proposed institution is designed to help allied nations finance defence and security projects by mobilising up to £100 billion ($133 billion) in low-cost funding. Supporters argue that the bank could play an important role in helping countries meet rising military spending commitments amid growing global security challenges.

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Hudon indicated that the initial group of members would likely consist primarily of European countries alongside Canada, although she declined to identify which nations were expected to join. She stressed that the project would remain open to additional members after its launch.

“My prime minister said we should not aim for perfection before launching this initiative,” Hudon said, noting that the priority is to bring together countries willing to commit at the outset while allowing the bank to expand over time.

However, questions remain over whether the institution can attract enough major economies to secure the coveted triple-A credit rating that would allow it to borrow cheaply on international markets.

Canada has so far publicly secured support from Luxembourg, which is set to serve as the bank’s European base. Prime Minister Carney recently said that a “critical mass” of countries had expressed interest in joining, although he did not identify them.

The proposal has also attracted interest beyond Europe. Hudon said South Korea had held productive discussions with project organisers and placed its chances of joining at roughly 50-50, potentially at a later stage.

Several other countries, including Italy, Spain, Türkiye, Belgium and Ukraine, have reviewed the proposal, according to sources familiar with the discussions. Germany has also joined talks as an observer while assessing the initiative.

The project faces competition from other defence financing efforts already taking shape in Europe. Among them is the European Union’s SAFE programme, which aims to support defence investment across the bloc.

Britain has so far refrained from joining the DSRB, instead backing a separate defence financing initiative known as MDM, developed alongside the Netherlands and Finland. Nevertheless, discussions have reportedly taken place over possible cooperation or alignment between the two projects.

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Funding commitments are emerging as one of the most sensitive issues in negotiations. According to Hudon, member contributions would be determined largely by the size of participating economies. Sources familiar with the discussions said Canada could contribute as much as €1.5 billion, while smaller countries could be expected to provide between €500 million and €750 million.

The initiative comes as NATO members face mounting pressure to increase defence spending in response to Russia’s war in Ukraine, heightened security concerns across Europe and growing scrutiny of China’s military expansion. NATO leaders agreed in 2025 to work towards spending 5% of GDP on defence and security-related investments by 2035, creating demand for new financing mechanisms to support those goals.

A group of former NATO advisers, senior military officials and banking executives first proposed the DSRB in 2024. The project has since gained support from several major financial institutions, including JPMorgan, Deutsche Bank, Commerzbank, ING, and leading Canadian banks such as RBC, BMO, CIBC, Scotiabank, TD Bank and National Bank of Canada.

While Canada is expected to provide an update on membership during the NATO summit, a decision on the bank’s headquarters is unlikely next week. Five Canadian cities, Toronto, Montreal, Ottawa, Halifax and Vancouver, remain in contention to host the institution.

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