Global banks' macroeconomic expectations and credit supply

Xiang Li and Steven Ongena

No 8/2025, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: We examine how global banks’ macroeconomic expectations shape credit supply. Comparing banks lending to the same firm within the same tranche, we find that greater GDP growth optimism is associated with greater credit supply. A onestandard-deviation increase in a bank’s growth forecast for the borrower’s country is associated with a 1.4-percentage-point higher loan share and 15% more lending to that country, or $133 million per month. The association is driven by participant lenders, strengthens with forecaster disagreement, intensifies at the onset of credit booms, and disappears after macroprudential tightening. Inflation expectations, by contrast, have no significant association with credit supply.

Keywords: asymmetric information; credit supply; expectation; global banks (search for similar items in EconPapers)
JEL-codes: E32 F34 (search for similar items in EconPapers)
Date: 2026
New Economics Papers: this item is included in nep-fdg and nep-ifn
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/319911.2/1 ... 025-08_Li_Ongena.pdf (application/pdf)

Related works:
Working Paper: Global Banks' Macroeconomic Expectations and Credit Supply (2026)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:319911

DOI: 10.18717/dpehpr-1e45

Access Statistics for this paper

More papers in IWH Discussion Papers from Halle Institute for Economic Research (IWH) Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().