The European Banking Authority (EBA) today published the latest chapter of its resolution Handbook on simulation exercises for resolution authorities. The Handbook provides, for the first time, a comprehensive framework of best practices, methodologies and processes to support resolution authorities in enhancing their preparedness and operational capabilities through structured simulation exercises.
Testing requirements are already imposed to institutions through the EBA Guidelines on resolvability testing, and simulations are becoming more prevalent in ensuring preparation among authorities, the EBA’s Handbook proposes a taxonomy for simulation exercises for resolution authorities to harmonise the use of main concepts within the financial stability framework.
In addition, the Handbook distinguishes between testing, simulations and dry runs and introduces six main types of simulation exercise: brainstorms, desktop exercises, walkthroughs, fire drills, decision-making exercises and operational simulations. This new chapter also presents the concept of end-to-end simulations, which combine multiple exercise types to replicate real-world resolution scenarios.
The Handbook describes in operational terms how to initiate, plan, prepare and deliver a simulation exercise. It provides practical guidance on defining objectives and scope, designing scenarios, allocating resources, managing delivery, and collecting feedback. The Handbook also includes templates and examples to support authorities in implementing effective and proportionate simulation exercises.
Legal basis and background
This initiative is part of the EBA’s broader mandate under Article 8(1)(ab) of Regulation (EU) No 1093/2010 to maintain an up-to-date Union resolution handbook. The Handbook draws on the experience of resolution authorities across the EU and aims to foster convergence, interoperability and cross-border cooperation.
Simulation exercises are a key tool for resolution authorities to test and refine their internal procedures, decision-making processes and coordination mechanisms as well as to train their staff.
The Handbook is available on the EBA’s website and is intended for use by all resolution authorities in the EU. It complements the EBA’s existing Guidalines on resolvability testing and supports the ongoing development of a robust and credible resolution framework.
(1.23 MB - PDF) (253.33 KB - PDF)Documents
Handbook on simulation exercises for resolution authorities
Annex Handbook on simulation exercises for resolution authorities
