Banks are lending again?

Andy Lees, UBS:

The Fed balance sheet expanded 1.3% w/w to a new all time high. US commercial bank cash liquidity fell heavily to 9.85%from 11.1%. Actual cash levels plunged by USD126.3bn, but the reason was the money was clearly piled into assets which jumped in value by USD233.3bn. Overall bank assets are now at their highest since July 2009 and just 3.75% off their all time high, presumably indicating sufficient confidence that the banks are willing to blow the cobwebs off their wallets once again. This may well explain why the Fed’s balance sheet is expanding again; it is not being driven by its own monetary expansion but rather by the commercial banks actually starting to take the lead again and expand credit. Other positive data showed credit card delinquency rates falling. More consumers have cash on hand from tax rebates and put the money towards holding down debt.