http://www.occ.gov/topics/capital-markets/financial-markets/trading/derivatives/dq114.pdf
Lots of good info at that link.
Zerohedge makes the case that what matters is not net exposure, but gross exposure, because if some of the parties blow up, others are then on the hook for the full face amount of the hedges, because they would then be impossible to net out. If John lends Bob $1,000,000, but takes out an insurance policy with Sue for $1,000,000 against risk of loss, John’s net is basically zero. But if Sue goes bankrupt, John becomes unhedged and becomes on the hook for the full million.