Clearing

About: Clearing is a research topic. Over the lifetime, 2638 publications have been published within this topic receiving 35295 citations.

Systemic Risk in Financial Systems

Abstract: We consider default by firms that are part of a single clearing mechanism. The obligations of all firms within the system are determined simultaneously in a fashion consistent with the priority of debt claims and the limited liability of equity. We first show, via a fixed-point argument, that there always exists a "clearing payment vector" that clears the obligations of the members of the clearing system; under mild regularity conditions, this clearing vector is unique. Next, we develop an algorithm that both clears the financial system in a computationally efficient fashion and provides information on the systemic risk faced by the individual system firms. Finally, we produce qualitative comparative statics for financial systems. These comparative statics imply that, in contrast to single-firm results, even unsystematic, nondissipative shocks to the system will lower the total value of the system and may lower the value of the equity of some of the individual system firms.

Deforestation in Brazilian Amazonia: History, Rates, and Consequences

Abstract: Brazil's Amazon forest remained largely intact until the "modern" era of deforestation began with the inauguration of the Transamazon Highway in 1970. Amazonian deforestation rates have trended upward since 1991, with clearing proceeding at a variable but always rapid pace. Amazonian forests are cut for various reasons, but cattle ranching predominates. The large and medium-sized ranches account for about 70% of clearing activity. Profit from beef cattle is only one of the income sources that make deforestation profitable. Forest degradation results from logging, ground fires (facilitated by logging), and the effects of fragmentation and edge formation. Degradation contributes to forest loss. The impacts of deforestation include loss of biodiversity, reduced water cycling (and rainfall), and contributions to global warming. Strategies to slow deforestation include repression through licensing procedures, monitoring and fines. The severity of penalties for deforestation needs to be sufficient to deter illegal clearing but not so great as to be inapplicable in practice. Policy reform is also needed to address root causes of deforestation, including the role of clearing in establishing land claims for both small and large actors.

Primary forest cover loss in Indonesia over 2000–2012

Abstract: Extensive clearing of Indonesian primary forests results in increased greenhouse gas emissions and biodiversity loss However, there is no consensus on the areal extent and temporal trends of primary forest clearing in Indonesia Here we report a spatially and temporally explicit quantification of Indonesian primary forest loss, which totalled over 602 Mha from 2000 to 2012 and increased on average by 47,600 ha per year By 2012, annual primary forest loss in Indonesia was estimated to be higher than in Brazil (084 Mha and 046 Mha, respectively) Proportional loss of primary forests in wetland landforms increased and almost all clearing of primary forests occurred within degraded types, meaning logging preceded conversion processes Loss within official forest land uses that restrict or prohibit clearing totalled 40% of all loss within national forest land The increasing loss of Indonesian primary forests has significant implications for climate change mitigation and biodiversity conservation efforts Deforestation affects climate, biodiversity and other ecosystem services This study quantifies Indonesia’s increasing rate of primary forest loss, which runs counter to the declining rates of loss in Brazil The results highlight the value of thematically consistent and spatially and temporally explicit information in tracking forest change

Humid tropical forest clearing from 2000 to 2005 quantified by using multitemporal and multiresolution remotely sensed data

Abstract: Forest cover is an important input variable for assessing changes to carbon stocks, climate and hydrological systems, biodiversity richness, and other sustainability science disciplines. Despite incremental improvements in our ability to quantify rates of forest clearing, there is still no definitive understanding on global trends. Without timely and accurate forest monitoring methods, policy responses will be uninformed concerning the most basic facts of forest cover change. Results of a feasible and cost-effective monitoring strategy are presented that enable timely, precise, and internally consistent estimates of forest clearing within the humid tropics. A probability-based sampling approach that synergistically employs low and high spatial resolution satellite datasets was used to quantify humid tropical forest clearing from 2000 to 2005. Forest clearing is estimated to be 1.39% (SE 0.084%) of the total biome area. This translates to an estimated forest area cleared of 27.2 million hectares (SE 2.28 million hectares), and represents a 2.36% reduction in area of humid tropical forest. Fifty-five percent of total biome clearing occurs within only 6% of the biome area, emphasizing the presence of forest clearing "hotspots." Forest loss in Brazil accounts for 47.8% of total biome clearing, nearly four times that of the next highest country, Indonesia, which accounts for 12.8%. Over three-fifths of clearing occurs in Latin America and over one-third in Asia. Africa contributes 5.4% to the estimated loss of humid tropical forest cover, reflecting the absence of current agro-industrial scale clearing in humid tropical Africa.

Does a Central Clearing Counterparty Reduce Counterparty Risk

Abstract: We show whether central clearing of a particular class of derivatives lowers counterparty risk. For plausible cases, adding a central clearing counterparty (CCP) for a class of derivatives such as credit default swaps reduces netting efficiency, leading to an increase in average exposure to counterparty default. Further, clearing different classes of derivatives in separate CCPs always increases counterparty exposures relative to clearing the combined set of derivatives in a single CCP. We provide theory as well as illustrative numerical examples of these results that are calibrated to notional derivatives position data for major banks.