Regulators at the New York Fed have been investigating banks’ exposure to a type of mortgage investment vehicle that has proliferated since the financial crisis amid concerns that a rapid rise in interest rates could trigger a sell-off.

The private discussions, described by one person as a “deep dive” into the topic, underscore regulators’ growing concerns about the rapid expansion of mortgage real estate investment trusts. MReits finance their purchases of long-term mortgages with short-term borrowings, known as repo, secured from dealer banks.

The worry is that MReits could be vulnerable to a sharp increase in interest rates, which would force the vehicles quickly to reduce their holdings of mortgage-backed securities (MBS) and set off a wider fire sale. That could potentially lead to further problems in the vast $4.5tn repo market, where big banks also secure large amounts of their funding by pawning their MBS and other securities.