Rescue packages and bank lending

► We analyse whether the rescue measures helped to sustain the supply of bank lending. ► We use information of more than 100 large banks headquartered in 14 OECD countries. ► We apply a setup that allows testing for structural shifts in the bank loan equation. ► Strong capitalisation generally supports loan growth in normal times. ► Recapitalisations sustain credit supply once bank balance sheets are sufficiently strengthened.