A panel of top financial regulators is targeting mortgage real estate investment trusts as a potential risk to the US financial system, the latest example of Washington's growing concern with market bubbles.

Next week, the Financial Stability Oversight Council, a panel comprising the top US financial regulators, is expected to cite mortgage REITs as a source of market vulnerability in its annual report, according to people familiar with the matter, a distinction that could set the stage for stricter oversight of the industry.