Financing Deterrence

This Means War

The episode explores the rapid evolution of the Defence, Security, and Resilience Bank (DSRB) as a transformative tool for global deterrence

Key takeaways

• The DSRB charter has been signed, with founding members like Canada and Luxembourg driving rapid implementation.
• Unlike the European Investment Bank, the DSRB is specifically designed to finance lethal capabilities such as weapons and ammunition.

Main topics

• DSRB development and progress
• Financing deterrence vs. defense funding

Notable quotes

What's really significant is... the last time that financing deterrence was actually used as a weapon system in its own right was probably when Ronald Reagan started up into spending and won the Cold War.

Conclusion

The DSRB represents a fundamental shift toward integrated, multi-natio

Transcript preview

Speaker 2 (0:06) Welcome to This Means War, a podcast that looks at contemporary conflict and national security. I'm your host, Peter Roberts, and in this episode, we're talking to Robbie Boyd about financing defence. The show is sponsored by Wraith in UK, a company committed to the creation of British jobs, British IP, and the UK defence industrial base, delivering capability across cyber intelligence, space and ISR, training transformation and design, and the manufacture of complex weapons in the UK. In December 2025, I chatted to former Brigadier General Robbie Boyd about the difficulties middle powers were having in financing their aspirations for defence spending and a potential solution in the form of the Defence Security and Resilience Bank. That institution, the DSRB, was just emerging from the drawing board just eight months ago and has accelerated beyond the expectations of many. Yet despite the promises of politicians in various democratic states about the world, cash is still not available to make the changes being promised in speeches. The DSRB may now be functioning with a charter, but the reality of putting money into the hands of the right people and starting the change programmes, recruitment and recapitalisation of military forces seems to be, as always, a bit behind the curve. You will have been somewhere strange for the last eight months if you hadn't noticed that Canada's Prime Minister Mark Carney was spearheading the campaign to get states to sign up for membership of the DSRB. I wanted to understand whether the delays and everything behind the speeches in getting states on board for all the talk about prioritising defence was simply a function of bureaucracy at work, was it some issue with banking rules or the reality of dealing with a new financial instrument? So I've asked Robbie Boyd to come back and update us on progress and what we might expect in the future. Just to remind you, Robbie's official bio reads as follows. He's a senior defence security finance leader specialising in mobilising commercial capital for defence security and resilience across NATO, the EU and allied partners. And it's a short sentence. almost does a disservice to his tactical and operational experience and his years operating at the highest levels in NATO for the strategic team. But his current work does point to one of the most significant of his achievements, the realisation of the DSR Bank as a funding tool for militaries and Western societies. Robbie, listen, welcome back to the show. Let's start with an update on the bank. Last time you and I spoke in a builder's tea room in Rotterdam, the DSRB was just standing up, right? And then... It was about to start work on, you know, we were hoping the first governments were going to have their alignment, then start work on building a constitution, a charter for the bank. Since then, there have been several announcements our listeners might have missed. So what's happened since the start of January 2026? We're now recording this at the end of August in 2026. What's happened in that time? Speaker 1 (3:06) Peter, firstly, thanks for asking me to come back for a show again. It's always a delight to be back with you. And of course, as I said before. And it seems to be going even better for you. It's great to see my students doing so well still. Absolutely brilliant. I mean, and I'm flabbergasted, of course, particularly in your case, but mate, brilliant. Nice to be back. Yeah, you can Speaker 2 (3:27) claim all the credit, Robbie, it's fine. Speaker 1 (3:30) Hey, but look, firstly, I've got the gist of what you're saying. Yeah, so when we talked before, we'd basically completed our first year from Rob Murray publishing the idea. that we'd been working on for about six years, back when he was the head of innovation at NATO, and I was looking after now Lord Peach as a chair of the military committee. And basically, he published in the Atlantic Council his idea about the Defence Security and Resilience Bank that we'd been working on for some time. After a year, we'd gone through a launch in London, information day to 42 nations, we told them what it was we were basically doing, and what the vision was for this thing. But going back to your first point, which is really quite interesting, because you could sort of think, yeah, it's been dragging on a bit since then. I mean, we're now another, what, seven months in and a few things have happened. And what has happened is going in the right direction. It seems a bit slow. Well, actually, mate, to be brutally honest with you, this is going at world breaking pace. And the reason it's going at world breaking pace with nations is because of the threat. So what is this? It's actually not about financing defence per se. That's an aspect of what it is we're doing. We're financing defence, security and resilience. So if you think to NATO, the NATO Washington Treaty Articles, if you think NATO Article 1 is about the good things we want to protect and therefore deter against the principles of the UN, NATO Article 2 is about... Basically looking after those financial institutions, actually, and other institutions that make us wealthy enough to be able to afford to pay for deterrence and working together as a team to do that as nations, which sort of embraces what the DSRB is. And then NATO Article 3, which is about resilience and being a resilient nation. And that covers everything, mate, from forest fires to owning your own water supply. to having your own steel industry not owned by foreign powers, for example, in the case of the United Kingdom, if we want to just highlight that right now as we stand. And then, of course, Article 4 and 5, which really takes you into having those capabilities to deter, i.e. monitoring your borders under Article 4 with ISR and strategic enablers having been funded, and then, if necessary, fighting, and fighting with a bigger stick. with more mass and better capability than those threats that we're facing. So that wraps it up neatly. There's lots more articles in the Washington Treaty, but that gives you a NATO flavour. Because NATO does deterrence. And it always has done deterrence. And it's done it particularly well. And I think one thing I was mulling over before this, and it did strike me that this would be a good one-liner, actually. I think it must have used it for a while, is when it comes to financing deterrence, which is all three of those aspects. What's really significant is the last time I think, if I pull it out of the hat, that financing deterrence was actually used as a weapon system in its own right was probably when Ronald Reagan started up into spending and won the Cold War, if you think about it. Because by making sure that we had extra enablers, in his case Star Wars, whether it had worked or not, suddenly we were outspending in our insurance policy. Speaker 1 (6:50) the enemy, the Soviet Union, which led to a fundamental breakdown of the Soviet Union and to a position we're in today, which hopefully was therefore the victory of the Cold War. So deterrence financing is more than just defence funding. And we can come on, I think, talk about that in a second. But you asked me a key question. What's happened really since? Well, when we were chatting before, we were close to bringing in the first few nations. We were talking to nations and educating them. about Rob Murray's paper essentially. We were building a very strong team of deterrence financing experts from across the globe, which ranges everything from my old boss, Lord Peach, to Fiona Murray, now head of the NATO Innovation Fund, through to great global economists in the hard power area like Rebecca Harding, people like Isshin Gjer from the Munich Defense Conference, and guys like Markus Feder and a whole who is a real multinational. lending institution expert and set up the EBRD and so on. All of these people all coming together, building this really strong global team of experts. So we were getting to that stage where we were operating as a good team and talking to nations. Then Mark Carney came. But it wasn't just Mark Carney. And Mark Carney is a great economist in his own right. He's a banker and everything else. So having him suddenly arrive on the scene with a vision of bringing medium powers together, which takes financing. Let's be honest. Any decision a leader makes has a financial bill attached to it. We always forget this. And that includes deterrence decisions and therefore financing deterrence. And that's a really important principle to remember here. But Mark Carney came in and we were well connected to him through various friends and networks. And Mark got it. And he got it because of his background. He knew that multinational lending institutions work. putting a flavour of deterrence on it, i.e. building a charter, as we have done, which allows lethal capabilities to be bought, not just other types of capabilities that no other lending institution can do for ethical reasons and so on. European Investment Bank, for example, can build you a barracks and buy you nice uniforms. But at the end of the day... They don't deter the Russians looking good and having nice barracks. They just think to themselves, oh, good, we've got something nice to sleep and some nice uniforms to put on when we get there. You need long range artillery and other types of capabilities to scare the living daylights out of them. And so Carly sort of realized that working together as a bigger global allied marketplace as well and financing this was going to work. And so did Luke Friarden. Now, many of you won't know who Luke Frieden is. Luke Frieden is one of the world's best financiers who happens to be the prime minister of Luxembourg. And when you walk into Luxembourg and say, are you guys interested? And you walk into the finance ministry and you're met with a sign that says, welcome to Luxembourg, let's make this happen. You suddenly realize that you can actually start to move at rocket speed and get things moving. And that is in total contrast to walking into... his magistracy's treasury and speaking to officials who say you know effectively what you doing here there's no money go away which is the normal sort of process that we're all used to those of us who worked in white aura so with all that in mind we've gone on at rocket speed and the reason i say that is from starting the paper to delivering the charter for the bank which is fundamentally its rule book if you like it's operating instructions its principles has taken us 18 months. Now, the last of the 40 institutions around the world, and the last one of these that came into being was the Asia Infrastructure Investment Bank. That took three and a half years and started with two nations. Well, in the last six months, we have managed to get 10 nations, more or less, and more to come. plus about 20 in the margins working out when they're going to join. Not a question of if, but over time when they're going to join. Because, of course, they've got to find the capital in their own budget cycles or they've already got it in wealth funds that they can contribute and join early and so on. There's a complication for every nation in terms of funding, putting the capital into the bank, which allows us to provide our services. And just to quickly recap for our wonderful listeners. What is it that the DSR Bank provides? Again, just to remind everyone, the DSR Bank provides over those three areas. Firstly, loans to governments. Now, why is that important? If you understand the safe mechanism in the EU, it's loosely based on DSR Bank ideas, actually. Basically, what we're able to do when we get a AAA rating, probably by 2028, because it takes a little bit of time to go through this and we've worked with Moody's and other agencies to understand it best. But once we get a AAA credit rating, we can give the cheapest loans you can possibly give to governments. Now, that means, for example, we can give in euros to Germany as and when they join, 3 % loan over 30 years if they want. to buy a deterrence capability that they urgently need. Why is that important? Because it's a permanent institution. So, you know, there's no rush. You can take it when you need it. That service is always there for you in your cycle. But it also means that you can fund things out of normal budgetary cycles. So what I mean by that is, going back to my point earlier, if the prime minister needs to take an emergency COBRA meeting and say, Blimey, we need a couple more destroyers urgently, for example, whatever it may be. I'm just picking this out as an example. Then how are we going to do that? How are we going to get that capability in? Well, you've got something you can turn to to finance that out of normal budgetary cycles. You can have that cheap loan. Now, everyone worried about debt and some nations like the French, like even the Belgians who have joined the DSR Bank as a founding nation. And the Brits especially are a bit worried about debt, and especially the Treasury, to their credit. They're trying not to take out more debt. But actually, if you're going to take debt out, it's going to be for emergencies, and it's going to be when you need to have this loan. And it's going to be because it's a decision the Prime Minister needs to take urgently. So we're funding stuff that's outside of normal budget cycles because it's needed. For example, as I mentioned earlier... if you need to buy back your steel industry that makes your warships and tanks that is currently owned by one of your adversaries, Chinese. And then there's all sorts of other climate change effects as well, wildfires and all sorts of water industry, as I mentioned before. Now, that's the first