The European Banking Authority has published a report benchmarking how banks test the implementation of their recovery plans through “dry run” exercises. It finds that dry runs can strengthen the operationalisation of recovery plans and institutions’ crisis readiness, but that effectiveness depends on whether exercises are used as genuine management tools rather than primarily to meet supervisory expectations. The comparative analysis reviews recovery plan submissions from 16 cross-border banking groups across 10 EU countries from the second half of 2024. Around two-thirds had carried out dry runs, with frequency ranging from annual or biennial to ad hoc, and some institutions having never conducted one. Testing most often focused on the operational feasibility of recovery options, especially liquidity-related actions such as collateral mobilisation, debt issuance and asset sales, and on escalation and decision-making following breaches of recovery plan indicators, while communication strategies were less frequently exercised. Where objectives, senior management engagement, documentation and follow-up were weak, dry runs tended to resemble compliance checks with limited lessons learned, whereas more mature programmes used multi-year roadmaps, clear ex ante objectives and structured action plans to embed recovery planning within broader risk management. The report is intended to provide benchmarks rather than prescriptive guidance and encourages institutions to maintain regular, high-quality testing and to better integrate recovery and resolution testing. It also links the work to the EBA Handbook on Simulation Exercises for Resolution Authorities and to the EBA’s preparation for a future role under the Crisis Management and Deposit Insurance framework to coordinate EU-wide simulation exercises across competent and resolution authorities.
European Banking Authority 2026-04-13
European Banking Authority publishes benchmarking report on banks’ recovery plan dry runs and highlights uneven maturity
The European Banking Authority has published a benchmarking report on how banks test their recovery plans through “dry run” exercises, based on submissions from 16 cross-border banking groups in 10 EU countries. The report finds that dry runs can materially enhance crisis readiness when used as genuine management tools with clear objectives, senior engagement and structured follow-up, but are less effective when treated mainly as compliance checks. It provides non-prescriptive benchmarks, encourages regular, high-quality testing and better integration of recovery and resolution exercises, and links this work to the EBA Handbook on Simulation Exercises.