This paper studies asset markets where buyers of assets do not inherit private information from previous owners and must learn asset quality over time. Imperfect information transmission reduces asymmetric information, but also reduces the trading volume, prices and efficiency. This result is...

We examine how a combination of credit market and asset quality information can jointly be used in assessing bank franchise value. We find that expectations of future credit demand and future asset quality explain contemporaneous bank franchise value, indicative of the feedback in credit market...