There is an interesting statistic out from Keefe, Bruyette & Woods on the economic recovery's progress.

Under the Capital Purchase Program, the Treasury invested $204.9 billion in 707 banking institutions.

Since then the Treasury received repayments totaling $192.2 billion, earned income of $26.3 billion from dividends, interest, and warrant dispositions, and posted losses of $3.1 billion. 

Mix that with the latest positive housing news, and the economic recovery appears to be taking hold.

Still, there is one negative aspect that should change, yet sadly it remains the same.

The latest Liberty Street Economics blog from the Federal Reserve Bank of New York points out that deposits held at the Fed by banks remain at historical highs.

"Since 2008, the amount of money banks hold on deposit at the Federal Reserve has increased dramatically," as shown in the chart below, the blog states. "The vast majority of these funds represent excess reserves, that is, funds held above the level needed to meet an institution’s reserve requirement."

Let me put it this way: Things aren't so great if bankers are keeping their money in the bank.

In January 2009, I sat with a source from Bank of New York Mellon in Canary Wharf, London, and she bemoaned the fact that their vaults were bursting at the seams with cash from other financial institutions.

"They are just parking their cash. And it's all from the U.S. Treasury," she said. We agreed that it's a practice that runs opposite to the most basic role of banking. After all, it's not money management to simply "set it and forget it."

The definition of a banker is loosely used these days. Mortgage lenders are sometimes called "bankers" for example. Here at HousingWire, a banker is an individual who manages the assets and liabilities for a financial institution in the form of deposits and lending.

Yes, lending. It's what bankers are supposed to be doing. It's in their very definition as a reason to choose banking as a profession. Instead, bankers today seem more keen to stuff their holdings into various mattresses, where it provides zero liquidity and nothing to the economic recovery.

It would be encouraging if the deposits were showing a trend of gradual release, no matter how slow. Sadly, the chart above shows things are only getting worse. More money than ever remains on the road to nowhere.

The Liberty Street blog notes ways to attempt to entice banks to lend to American households.

That money could boost economic activity, but as it stands, it's just one problem with the economic recovery that is only getting worse.