The Federal Reserve moved Monday to overhaul the financial apparatus behind derivatives trading, a regulatory step intended to assure that the failure of a major bank or investment firm would not create the systemic threat seen in March after the collapse of Bear Stearns.

Timothy F. Geithner, the president of the Federal Reserve Bank of New York and one of the chief architects of the Bear Stearns bailout, convened a meeting of 17 major financial institutions Monday afternoon to discuss creating a central system for the trading and settlement of credit derivatives, a sophisticated type of financial instrument.

Because no central clearinghouse currently exists for derivatives trading, a default by a major party could lead to cascading losses at big banks and brokerage firms. Fears about this so-called counterparty risk have rattled nerves on Wall Street amid a worsening credit crisis.

Participants at the meeting, which included every major investment bank, also agreed to register their trades with a computerized system that would allow for nearly instantaneous recording.