ING, JP Morgan, Commerzbank, LBBW, and RBC Capital Markets are backing a new defence bank for Europe.

The new bank is being set up by NATO countries and their allies to finance their defence needs.

ING said it will provide both financial and technical support to the Defence, Security and Resilience Bank (DSRB), with further banks set to support the new financial institution in the future.

The initiative is endorsed by the European Parliament and a UK government-led task force.

The move comes after a recent pledge by NATO countries to invest five per cent of their GDP to defence.

ING said that building on the capital markets expertise of the participating banks, the DSRB will issue AAA-rated bonds for countries to fund their defence production and procurement.

It will also support defence modernisation and supply chain resilience across Europe and the Indo-Pacific region.

”We cannot meet today’s security challenges with yesterday’s financial tools,” said Mark Pieter de Boer, ING’s chief commercial officer. “As a big European bank, we support the societies we operate in."

Pieter de Boer added: "Clearly there now is a bigger need for financing of defence activities focused on protecting Europe. The Defence, Security and Resilience Bank is the kind of bold, coordinated initiative we believe Europe and its allies urgently need. ING is proud to support it.”

ING said that the initiative is in line with its renewed defence policy to support clients with defence-related transactions that fall within the bank’s environmental and social risk framework.

The participating banks will help countries access bond markets and engage investors for their defence needs, as well as provide technical expertise on sovereign lending instruments, capital structuring, risk and liability management and ratings advice.

A detailed plan and draft charter for the new defence bank are being drawn up by the DSRB Development Group, an international team of bankers, lawyers, defence investment specialists and senior defence policy leaders.

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