Defence, Security and Resilience Bank: Opportunities and Risks of a New Financial Architecture for Euro-Atlantic Defence (VUBIR (Vrije Universiteit Brussel))

Summary

• Introduced in December 2024 by Rob Murray, the Defence, Security and Resilience Bank (DSR Bank) is designed as a multilateral development bank with an initial capital of around €117 billion.p.4
• The DSR Bank aims to leverage national contributions by 5 to 8 times through a AAA rating, backed by £20 billion of paid-in capital and £80 billion of callable capital.p.5
• The European Investment Bank quadrupled its spending on security and defence to €4 billion in 2025, with a target of €4.5 billion in 2026.p.9
• European defence funding mechanisms include SAFE (€150 billion in loans), EDIP (€1.5 billion dotation), EIB (€4+ billion/year), and the ReArm Europe initiative targeting €800 billion.p.10
• Participating as a shareholder in the DSR Bank would require Italy to contribute an initial paid-in capital estimated between €3 billion and €5 billion.p.11

Key insights

1. The Defence, Security and Resilience Bank is designed as a multilateral development bank to provide long-term loans and guarantees without creating joint debt among member states.p.3
2. Promoters aim to make the DSR Bank fully operational by 2027, opening participation to euro-atlantic and indo-pacific allies.p.4
3. The primary operational target of the DSR Bank is small and medium-sized enterprises (SMEs) that supply specialized components and sub-systems across defense value chains.p.5
4. Major European military powers, including Germany and the United Kingdom, opted not to join the initial founding phase of the DSR Bank.p.6
5. By offering credit guarantees, the DSR Bank seeks to reduce perceived risks for commercial lenders and ease bottleneck inflation in defense supply chains.p.7
6. Unlike eurobonds, the DSR Bank model avoids mutualization of debt by keeping each member country responsible for its own individual shares.p.9
7. Italy has been included in the second wave of SAFE loans for approximately €14.9 billion to support its defense policy priorities.p.12