Abstract
We study the role of subjective macroeconomic expectations in guiding financial intermediation choices and specifically how loan officers' subjective expectations about future interest rates, inflation, and economic growth shape their loan granting decisions above and beyond individual and macroeconomic observables. Whereas the subjective expectations and choices of firms' managers and households have been studied extensively over the last decade, the lack of viable data for large and representative samples of loan officers has hindered researchers from studying the question we propose. We tackle this issue by accessing loan officers from various Chinese banks who source borrowers from the same online financial intermediation platform. We administer surveys that include an information treatment component to elicit loan officers' macroeconomic expectations, obtain exogenous variation in their expectations updates, and estimate the causal effects of expectations updates on credit allocation decisions at both the extensive margin (loan approval/rejection) and the intensive margin (most likely interest rate assigned to loans, conditional on acceptance).