This paper proposes a tractable way to incorporate lending standards ("credit qualification thresholds") into macro models of financial frictions. Banks can reject borrowers whose risk is above an endogenous threshold at which no lending rate sufficiently compensates banks for the borrowers’...

We examine determinants of creditor recoveries from defaulted debt instruments. First, we find that common measures of seniority and security, such as debt instrument types and collateral types, explain much less variations in recovery rates across defaulted debt instruments than seniority...