New York's main financial regulator joined a probe into possible manipulation in the sale of U.S. Treasurys, the deepest and most actively traded market in the world. Citing people familiar with the case, the banking watchdog sent letters to firms including Goldman Sachs, Barclays and Deutsche Bank over Treasury market concerns, the Financial Times reported.

The Department of Financial Services joined the U.S. Department of Justice, which reportedly launched an inquiry this spring into at least three of the 22 banks that serve as primary dealers for U.S. Treasurys. Neither the banks involved nor regulatory agencies have commented publicly on the probe. 

Primary dealers are authorized to participate in regular auctions for U.S. debt issued by the Treasury Department. The secretive process involves a back-and-forth between the federal agencies and the participating banks that sets interest rates for new Treasurys. 

The probe follows several high-profile cases, in which major banking institutions were found guilty of manipulating the world's most important interest-rate benchmarks. In May, banks including Citibank, JPMorgan Chase & Co. and Barclays pleaded guilty to conspiring to rig Libor, an international benchmark rate that undergirds contracts ranging from student loans to complex derivatives.

In the past year, traders have raised questions over the market for Treasurys, which has seen bewildering irregularities, including a so-called flash crash in October 2014. 

Sold to fund the U.S. government, Treasurys play a central central role in the global financial system. American debt is considered among the safest financial assets in the world, serving as a crucial component in retirement portfolios, pension fund holdings and sovereign wealth funds. And since interest payments on the debt come out of federal coffers, U.S. taxpayers would be the ones footing the bill if manipulation occurred in these markets.