Some of the world's biggest investment banks are waiting this week to hear whether the most serious upset yet in the young and heady world of credit derivatives can be resolved without further pain. They have set the rest of the industry - including other banks, hedge funds and financial institutions - a deadline of tomorrow to accept their proposal for settling transactions affected by the bond default of Delphi, the US car parts maker.

When Delphi filed for bankruptcy protection on October 8, it triggered frantic activity on Wall Street to find ways to deal with open credit derivatives contracts that tracked the performance of its corporate bonds and needed to be settled. By yesterday afternoon just 69 entities - including more than one unit with some groups - had agreed to go along with the banks' proposal for an auction that is designed to set an agreed price for Delphi's bonds.