Fed scrutinizes bank exposure to mReits.

The New York Fed has reportedly been taking a "deep dive" into banks' exposure to mortgage real estate investment trusts (mReits) (REM), which fund acquisitions of long-term mortgages with short-term repo borrowings and which have proliferated since the financial crisis. The fear is that a rapid increase in interest rates could force the mReits to quickly cut their holdings of mortgage-backed securities and spark a wider sell-off. MReit giants include Annaly (NLY) and American Capital (AGNC).