Will regulatory changes finally unleash the velocity of money?

The banks have been saying that they are restricted in lending due to capital constraints due to two rules that the regulators have imposed since the crisis:

1. Banks must retain some of the risk for mortgages they sell that have less than 20% equity behind them.
2. The banks must take back mortgages they sell that go bad due to "their mistakes."

These innovations meant that even loans sold into the market effectively remained on the balance sheet and thus required capital. Since capital requirements are higher than they ever have been, lending has been fairly static despite Fed stimulus.

This is part of why easy money has not resulted in more lending.

Now this has changed. The regulators have done away with both rules. (See the NYT article: http://nyti.ms/1yZEtup )

Will this result in an acceleration in lending? It should. But how much? Maybe Bernanke should apply again.

This graph shows how anemic mortgage lending has been: