NEW YORK ( TheStreet) -- With over $1.5 trillion in free reserves parked with the Federal Reserve, critics have taken issue with the big banks for being gun shy about making loans in the aftermath of the crisis and hoarding cash. But banks' anemic lending activity in recent quarters has more to do with weak demand for loans than tight credit standards or a reluctance to lend, according to industry analysts. The large banks are certainly well -capitalized to make loans. Bank of America's ( BAC) loan-to-deposit ratio has dropped to 96% as of March 31, from 109% in March 2007. Over the same period, Wells Fargo's ( WFC)ratio of loans to deposits dropped to 94% from 115%. Citigroup ( C) and JPMorgan Chase ( JPM) might be the worst performers on this regard with their loan to deposit ratios at 77% and 73% respectively. With that kind of dry powder, banks are under tremendous pressure to increase their lending from regulators that have been urging them to make more loans to shareholders demanding to see revenue growth. The Fed also continues to maintain an easy money policy that allows banks to borrow at near-zero rates and lend at higher rates, making lending particularly profitable. But uncertainty about the economy and the uneven recovery in jobs has made consumers and small businesses even with good credit history nervous about borrowing. And for those with underwater mortgages and massive debt, the process of deleveraging is not yet complete. "I don't believe it when politicians talk about how banks aren't lending and that we are hoarding cash, " said Frank Sorrentino, CEO of North Jersey Community Bank. "Banks don't make money unless they lend. It is not natural for them not to lend. But the number of qualified borrowers has shrunk dramatically. Borrowers out there are not looking for more debt. There is no expansion, no hiring. There is a lack of demand for loans." Recent data does seem to suggest a greater willingness on part of banks to ease credit terms and make more loans.