Banks in Denmark adjust their capital and lending decisions based on changes in capital and disclosure requirements. When required capital ratio increases, banks increase their capital ratio by reducing asset risk and reshuffling loans to lower-risk ones. Decreasing required capital ratio leads to more lending to firms but also higher bank leverage. The effects are stronger when breaching the required ratio leads to losing the banking license. There is no difference in effects between confidential and public disclosure of capital requirements. This shows a tradeoff between bank resilience and promoting the economy through increased lending.