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

There's a consensus on how to further safeguard the $1.6 trillion tri-party repurchase-agreement market, which almost collapsed amid the financial crisis. The plan is to move most repo transactions onto central clearinghouses, which would prevent a default by a dealer from pushing counterparties into abruptly dumping repo collateral. Such fire sales, which the Federal Reserve has been highlighting as a threat, helped sink Lehman Brothers Holdings Inc. in 2008 and forced the central bank to step in to keep credit flowing.

Yet the firms at the forefront of developing or expanding central clearinghouses for repos — CME Group Inc., the Depository Trust & Clearing Corp. and LCH.Clearnet Group Ltd. — have been unable to figure out a structure that aligns participants' interests and builds the needed cash backstop. Nor has the Fed shown it's willing to serve as lender of last resort to a central counterparty clearinghouse, known as a CCP. That backing might speed the creation of a CCP.