EBA report on recovery plans dry runs

The European Banking Authority (EBA) has published a report analysing the recovery plan submissions of 16 European cross-border banking groups, whose parent institutions are located in ten different EU countries, with a particular focus on the practices observed in relation to recovery plan so-called 'dry runs'. The exercise aims to inform institutions' future designs of recovery plan dry runs and contribute to the development of useful benchmarks for their implementation—it is not intended to provide prescriptive guidance.

The analysis confirms that, although recovery plan dry runs are not explicitly covered in the regulatory framework, they are a highly effective tool for enhancing the operationalisation of recovery plans and strengthening institutions' overall crisis preparedness frameworks. Most institutions recognise their value; however, approaches and levels of maturity vary significantly across institutions. Where dry runs are carried out primarily to meet supervisory expectations, they tend to be less effective, resembling compliance exercises with limited insights and follow-up actions. In contrast, institutions with more advanced practices use dry runs as genuine management tools, fully embedding recovery planning within their broader risk management framework. In these cases, dry runs strengthen internal preparedness by enhancing the credibility, feasibility and organisational understanding of recovery planning arrangements.

Looking ahead, the EBA highlights the importance for institutions to maintain regular, high-quality testing of key recovery plan elements and to continue refining their dry run practices. The report also points to the potential benefits of stronger synergies and better integration of testing activities across recovery and resolution.

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