(Bloomberg) -- The contraction in the U.S. market for borrowing and lending securities amid rising interest rates and heightened global bank regulation will increase this year, according to Fitch Ratings.

The U.S. tri-party repurchase agreement market contracted $257 billion, or 14 percent, in 2013 to $1.61 trillion as of the end of 2013, according to Federal Reserve data, Fitch wrote in a report published today. A 28 percent decline in repos using agency mortgage-backed securities led the fall, while usage of Treasuries as collateral for the transactions also dropped, contracting 10 percent.

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