Global Banks’ Macroeconomic Expectations and Credit Supply
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SeriesErasmus Finance Seminars
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SpeakersSteven Ongena (University of Zurich, Switzerland)
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FieldFinance, Accounting and Finance
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LocationErasmus University Rotterdam, Campus Woudestein, Langeveld 1.08
Amsterdam -
Date and time
June 09, 2026
11:45 - 13:00
Abstract
We examine how global banks’ macroeconomic expectations shape credit supply. Exploiting granular within-firm variation in lender beliefs—by comparing multiple banks lending concurrently to the same firm—alongside an instrumental variable strategy, we document that optimistic GDP growth expectations causally drive credit expansion. Quantitatively, a one-standard-deviation increase in a lender’s GDP forecast expands its loan share by over 8 percentage points (0.75 standard deviations), generating $75 million in additional lending. Conversely, global banks’ inflation expectations only impact credit supply during recent high-inflation regimes. Finally, we show that elevated growth expectations induce a distinct reallocation of credit toward riskier borrowing firms.