Wall Street dealers held an unprecedented emergency trading session on Sunday afternoon in a frantic effort to prepare for the possible bankruptcy of Lehman Brothers and limit the knock-on losses of its collapse on other financial institutions.

After meetings with New York’s Federal Reserve ended in the early hours of Sunday, the Fed later called dealers at lunchtime and urged them to hold the special session. The plan was to allow dealers to take on new positions offsetting the risks from derivatives trades they have with Lehman, in order to reduce the rush to unwind billions of dollars of contracts on Monday should the investment bank file for bankruptcy.