Big banks and dealers should have a central clearing house for the $62,000bn credit derivatives market by the end of the year, marking an important milestone in efforts to reduce systemic risks from inefficient trading and counterparty exposures.

Dealers also committed themselves to expanding automated trade-matching and electronic processing in other over-the-counter derivatives markets when they delivered a progress report on Thursday to the Federal Reserve Bank of New York. The NY Fed is spearheading the regulatory drive to cut trading and settlement risks in OTC derivatives markets.