We investigate how a bank adjusts its lending when it has suffered one of the heaviest credit losses in its history. Showing that such a shock is mostly exogenous, we estimate from granular data of all German banks that the heaviest losses induce banks to reduce their corporate lending by 1.79 euro for each euro lost. This sensitivity is in line with (quite heterogeneous) results of earlier studies but significantly lower than the sensitivity under a constant-leverage regime. To control for credit demand we construct a synthetic competitor of each bank. This new method reconciles estimation at bank level with demand clustering at the level of subportfolios.