The Federal Reserve Bank of New York said that it welcomes a pledge by major market participants to further strengthen the operational infrastructure for over-the-counter derivatives.

In a letter released today, market participants outline plans for building a stronger integrated operational infrastructure capable of supporting the rapidly growing OTC derivatives market.

The commitments presented in this letter will help address weaknesses in the OTC derivatives market, says the New York Fed. “Although efforts by the Federal Reserve and other U.S. and European regulators over the past three years have led market participants to significantly improve many operational elements of the OTC derivatives infrastructure, financial market events have demonstrated that broader action is warranted to address additional market design elements,” it notes.

The bank said that the following areas constitute its central priorities for addressing both operational and market design concerns for OTC derivatives: instituting a central counterparty for credit default swaps, reducing outstanding trades, enhancing market transparency, a continuing operational improvements.

The New York Fed says it will continue to work with domestic and international industry supervisors to monitor progress and encourage further effort to improve OTC derivatives operational infrastructure.