Private capital flows to emerging markets are set to fall in 2014 to their lowest since the global financial crisis as expectations grow for an unwinding in U.S. Federal Reserve stimulus, a global banking group said in a new report.

Tighter U.S. policy and weaker growth in emerging markets would reverse the main drivers that have sent foreign investors piling into emerging debt and equities in recent years in a search for yield, the Institute of International Finance said.

The IIF cut its forecast for private capital flows to emerging markets to $1.112 trillion in 2014, the lowest since 2009, from an estimated $1.145 trillion this year.

While the IIF assumed a smooth exit from the stimulus program in the United States, a market rout could not be ruled out if U.S. Treasury yields jumped sharply.

"Following the recent shift in market expectations on the timing of a U.S. exit from monetary accommodation, a further sharp increase in bond yields could send severe ripples across the global financial system," it said in a report late Thursday.

Even under the baseline scenario, flows to emerging economies in Asia and Europe would be especially hard-hit, the IIF forecast. Inflows to Africa and the Middle East and Latin America were expected to rise slightly in 2014.

Emerging market currencies, equities and bonds have dropped since early May as speculation has grown about when the Fed will start to pull back on bond purchases, gradually lessening the extra liquidity being pumped into financial markets.

Funds tracker EPFR said investors pulled $23.3 billion out of global bond funds in the latest week, including $5.6 billion from emerging market funds.

The IIF said countries such as Ukraine, Hungary and Turkey were particularly vulnerable to a reversal in foreign capital flows, while others such as China, South Korea and Saudi Arabia would continue to be a major source of external financing.

Overall, private sector outflows from emerging markets were expected to rise to $1 trillion in both 2013 and 2014.