Oct 25 (Reuters) – Britain will not join the Canada-led Defence Security and Resilience Bank, according to a source familiar with the matter, but the two countries said they would develop a framework for cooperation between their respective defence-funding initiatives.
In a statement on Sunday, the two governments said they had agreed to establish two distinct but complementary institutions to support each other on investment opportunities and strategic challenges.
“We have been working closely to consider how the Multilateral Defence Mechanism (MDM) and Defence, Security and Resilience Bank (DSRB) can best advance our shared objectives. We have agreed to develop a framework of cooperation that works in the interest of both institutions,” the statement said.
According to another source, the two governments were unable to agree on key issues including the location of the headquarters of the new bank, the level of joint procurement, lending to members, and the rules around new members joining in the future.
The source said the MDM will focus on accelerating defence investment, joint procurement through financing, and bringing together demand across NATO allies to reduce procurement costs, while the DSRB will complement it by supporting investment in defence industries and supply chains, focusing more on single sovereign lending.
The DSRB has faced challenges securing support from larger European nations. Britain has previously distanced itself from the project.
Britain and Canada said the MDM and DSRB will be designed to work in close partnership, so they can support each other on emerging industrial priorities, investment opportunities and strategic financing challenges.
(Reporting by Anusha Shah in Bengaluru, Nivedita Balu in Toronto, William Schomberg and Elizabeth Piper in London; Editing by Andrew Heavens and Chris Reese)
