UK banks and building societies reported that their total funding volumes (requirements) fell significantly in the three months to early December, according to the Bank of England´s (BoE) latest Bank Liabilities Survey.That is important because changes in the price, quantity and composition of banks' liabilities may affect their willingness or ability to lend, and the price of lending, the BoE explained. The above was the result of a large fall in the volume of 'other' funding, whereas volumes of retail deposits had increased. Lenders also expected total funding volumes to continue to fall significantly in the first quarter of 2014.Similarly, lenders´ retail funding costs fell in the fourth quarter and were expected to fall again noticeably in the first quarter.Meanwhile, banks' issuance of long-term wholesale debt was positively impacted by a number of factors during the period, including improved market liquidity and non-price terms, the BoE explained. Regulatory drivers had pushed up significantly on lenders' demand for capital for the fourth consecutive quarter in the fourth quarter, whereas improved macroeconomic conditions had made a negative contribution.For Investec analyst Ian Gordon, the survey results were part of the explanation behind Tuesday´s strong gains in the shares of UK banks such as Lloyds and RBS, particularly the former. "It's not that it contains surprising news, but de facto confirmation of improving capital metrics, improving retail deposits and (significant) declines in funding volumes/requirements is all helpful and will cause some to revisit Net Interest Margin forecasts with (further) upside potential," he explained to Sharecast. AB