Loan sales under asymmetric information
Título de la revista
Vargas Martínez, Mónica
ISSN de la revista
Título del volumen
Universidad del Rosario
Loans are illiquid assets that can be sold in a secondary market even that buyers have no certainty about their quality. I study a model in which a lender has access to new investment opportunities when all her assets are illiquid. To raise funds, the lender may either borrow using her assets as collateral, or she can sell them in a secondary market. Given asymmetric information about assets quality, the lender cannot recover the total value of her assets. There is then a role for the government to correct the information problem using fiscal tools.
Loan Sales , Asymmetric Information , Liquidity , Securitization
Vargas Martínez, M. (2010). Loan sales under asymmetric information. Bogotá: Universidad del Rosario, Facultad de Economía.