Treasury Secretary Hank Paulson has more than once said he's not afraid to change his mind to accommodate changing circumstances. The rest of the Bush administration is now adopting that philosophy, though critics are already complaining that it's doing so too late to do much good.

A presidential working group consisting of senior officials from the Federal Reserve, the Securities and Exchange Commission, and the Commodity Futures Trading Commission concluded today that it would be a good thing to get a handle on the trillions of dollars of over-the-counter derivatives contracts at the heart of the latest chapter of the economic meltdown.

The first step in reining in this previously secretive and unregulated market is to establish credit default swap central counterparties—clearinghouses between parties that own debt instruments and others willing to insure against defaults.

Some of these counterparties, which could be banks but not interdealer brokers, should be up and running before the end of the year, the working group said.

Such clearinghouses would provide a window at least into the $58 trillion market for credit default swaps, permitting market participants and regulators to see who is assuming which risks—and thus be able to determine whether the companies collecting fees for guaranteeing debts actually have the assets to make good on their promises.

The failure of companies like American International Group to stockpile enough collateral to back up vast pools of credit default derivatives is behind the $100 billion government bailout of the firm and the crippling lack of trust in credit markets generally.

"The virtually unregulated over-the-counter market in credit default swaps has played a significant role in the credit crisis, including the now $167 billion taxpayer rescue of A.I.G.," S.E.C. chairman Christopher Cox said in a statement.

"Bringing transparency to this market is vitally important," Cox added. "The S.E.C. has regulatory and supervisory authorities over the clearing agencies that may be established for credit default swaps, and we will use those authorities to strengthen the market infrastructure and to protect investors."

The working group sketched the outline of the proposed new regulatory structure in a set of policy objectives. Because the market for credit default swaps and other derivative contracts involves companies regulated by different federal agencies—banks overseen by the Fed, securities firms that report to the S.E.C., and futures and options traders covered by the C.F.T.C.—those agencies have formally agreed to "cooperate, coordinate, and share information."

The agencies were quick to add that they would "take all actions reasonably necessary to preserve, protect, and maintain all privileges and claims of confidentiality related to nonpublic information" they gather in the course of monitoring the over-the-counter derivatives market.

But they were equally swift to add that some regulation of the market was needed, and fast.

"A well-regulated and prudently managed C.D.S. central counterparty can provide immediate benefits to the market by reducing the systemic risk associated with counterparty credit exposures," the working group said in a statement.