After four years of efforts, regulators and the financial firmswith the most at stake have failed to extinguish systemic risk in acrucial short-term lending market that greases the wheels oftrading in U.S. Treasuries.

There's a consensus on how to further safeguard the $1.6trillion tri-party repurchase-agreement market, which almostcollapsed amid the financial crisis. The plan is to move most repotransactions onto central clearinghouses, which would prevent adefault by a dealer from pushing counterparties into abruptlydumping repo collateral. Such fire sales, which the Federal Reservehas been highlighting as a threat, helped sink Lehman BrothersHoldings Inc. in 2008 and forced the central bank to step in tokeep credit flowing.

Yet the firms at the forefront of developing or expandingcentral clearinghouses for repos — CME Group Inc., theDepository Trust & Clearing Corp. and LCH.Clearnet GroupLtd. — have been unable to figure out a structure that alignsparticipants' interests and builds the needed cash backstop. Norhas the Fed shown it's willing to serve as lender of last resort toa central counterparty clearinghouse, known as a CCP. That backingmight speed the creation of a CCP.