The Pitfalls of Central Clearing in the Presence of Systematic Risk

Through the lens of market participants' objective to minimize counterparty risk, we provide an explanation for the reluctance to clear derivative trades in the absence of a central clearing obligation. We develop a comprehensive understanding of the benefits and potential pitfalls with respect to a single market participant's counterparty risk exposure when moving from a bilateral to a clearing architecture for derivative markets. Previous studies suggest that central clearing is beneficial for single market participants in the presence of a sufficiently large number of clearing members. We show that three elements can render central clearing harmful for a market participant's counterparty risk exposure regardless of the number of its counterparties: 1) correlation across and within derivative classes (i.e., systematic risk), 2) collateralization of derivative claims, and 3) loss sharing among clearing members. Our results have substantial implications for the design of derivatives markets, and highlight that recent central clearing reforms might not incentivize market participants to clear derivatives

A policy model to analyze macroprudential regulations and monetary policy

We construct a small-open-economy, new Keynesian dynamic stochastic general-equilibrium model with real financial linkages to analyze the effects of financial shocks and macroprudential policies on the Canadian economy. The model incorporates rich interactions between the balance sheets of households, firms and banks, long-term household and business debt, macroprudential policy instruments and nominal and real rigidities and is calibrated to match dynamics in Canadian macroeconomic and financial data. We study the transmission of monetary policy and financial and real shocks in the model economy and analyze the effectiveness of various policies in simultaneously achieving macroeconomic and financial stability. We find that, in terms of reducing household debt, more targeted tools such as loan-to-value regulations are the most effective and least costly, followed by bank capital regulations and monetary policy, respectively

BURDEN OF SUBSTANCE USE AMONG U.S. POPULATION WITH CHILDHOOD AND ADULTONSET ASTHMA

INTRODUCTION: Asthma is the most common chronic childhood disease. Substance use is associated with increasing severity of asthma symptoms and a major risk factor for status asthmaticus or asthma-related death. In the last decade, there is no nationwide literature showing prevalence of various substance use among asthmatics. Aim of this study is to identify the burden of substance use in US population with childhood onset asthma (COA) and adult-onset asthma (AOA) METHODS: We conducted a retrospective cross-sectional study using NHANES data from 2013 to 2018. AOA and COA assessed using questionnaire MCQ010 and MCQ025. Drug use variables were summarized and univariate analysis was performed using Mann Whitney test and Chi-square test to determine association between asthma and drug use. Mix-effect multivariate survey logistic regression analysis was performed to identify predictors of AOA and COA. RESULTS: Out of a total of 402,167 participants, prevalence of COA was 10.51% (42,275) and AOA was 4.79% (19,245). Prevalence of methamphetamine use (42.03% vs 41.99% vs 39.34%, p\u3c.0001), was higher in AOA, than COA and no asthma. Smoking (21.41% vs 18.12% vs 16.09%, p\u3c.0001), high alcohol intake (50.98% vs 44.02% vs 47.33%, p\u3c.0001), cocaine use (97.14% vs 93.53% vs 95.30%, p\u3c.0001), marijuana use (62.22% vs 55.42% vs 51.67%, p\u3c.0001) and heroin use (18.89% vs 18.74% vs 14.50%, p\u3c.0001) were more prevalent in COA than AOA and no asthma. In regression analysis, AOA was associated with higher prevalence odds of marijuana use (aOR 2.53, 95%CI 2.53-2.54, p\u3c.0001) and heroin use (1.82, 1.82-1.83, p\u3c.0001) whereas COA was associated with higher prevalence odds of smoking (1.19, 1.19-1.19, p\u3c.0001), alcohol abuse (1.06, 1.06-1.06, p\u3c.0001), cocaine use (67.99, 67.67-68.31, p\u3c.0001) and methamphetamine use (1.67, 1.67-1.67, p\u3c.0001). CONCLUSIONS: Substance use is common in childhood and adult asthmatics. Given the high risk of association between asthma and substance use, policy makers and community programs should be built in a way to help improve the compliance in asthma care and decrease rates of substance use disorders in this population. Our study was limited with recall bias, absence of causality, absence of severity and follow up of asthma, and quantification of substance use