We provide evidence consistent with a “credit-line drawdown channel” to explain the large and persistent crash of bank … lending, even after stabilization policies and even if drawdowns were accompanied by deposit inflows. Bank provision of credit … incorporated tractably into bank capital stress tests …

We study the crash of bank stock prices during the COVID-19 pandemic. We find evidence consistent with a "credit line …, even after policy measures were implemented. We conclude that bank provision of credit lines appears akin to writing deep … can be incorporated tractably into bank capital stress tests …