The lateral bracing system of a building should ensure the stability of the building, in terms of the usability and the total load capacity. The governing loads for the lateral bracing system are horizontal loads due to wind and earthquake. The horizontal loads are traditionally distributed to the bracing elements according to the uncracked elastic state dependent on the bending stiffness in the elastic (uncracked) state. This method does not allow consideration of non-linear effects and load redistribution. Within the framework of the PRB Research Cooperation – Improving the Practical Use of Structural Design Standards through pre-normative work – Subcontract 5: Masonry Construction, Subproject 3: “Large Shear Walls” [7], the cracked or plastic state can be taken into account through a displacement based approach. A matrix formulation for both the linear and cracked states has been derived and implemented.