Dealers in credit derivatives are being urged to “tear up” some of the outstanding trades that could pose a potential risk to the financial system as part of renewed efforts by US regulators to improve the crucial sector’s infrastructure.

Efforts to tackle operational inefficiencies in the infrastructure underlying the notional $62,200bn market for credit default swaps, which is lightly regulated, have taken on a fresh urgency because of the credit crisis, and is likely to draw more scrutiny in coming months.