A report commissioned by the U.K. Labour Party proposed that the Bank of England's Prudential Regulation Authority require banks to hold relatively more capital against mortgage lending to encourage lending to small businesses, the Financial Times reported Dec. 11.
The report, titled "Financing Investment" and written by research firm GFC Economics, argued that banks needed to make their lending productive by shifting focus from unproductive lending such consumer credit borrowing, the report said.
U.K. Shadow Chancellor John McDonnell said Labour would conduct a consultation on the proposed changes, adding that first-time home buyers will not be impacted by such a move, the FT added.
The Labour-commissioned report also suggested that the central bank's headquarters be transferred to Birmingham from central London, according to the report.
