I'm showing 5 down from the high.
Pima posted a comment regarding bank buying of equities. Here is how I see it:
The Fed makes the reserves available to banks to lend. If banks choose not to lend the reserves then money supply does not increase and money is not created out of thin air. Lending is the only way to increase the money multiplier. Banks are not lending now because they are maintaining low risk tolerance.
That being said, banks can present securities to the Fed against which they can borrow. However, banks don't need to collateralize loans with the Fed in order to borrow, they can go to the private market at ultra-low rates (compliments of the Fed) and obtain funds. This used to be easier pre-crisis but is still available to banks today in that they can use the commercial paper market, inter-bank market, or securitize segments of their loan portfolios. However, banks have low risk profiles nowadays so they leave it up to their clients to buy stocks. Trust departments are the only significant source of bank exposure to equities, other than investments in other financial instutions. Banks don't want to use the Fed Discount Window because it indicates weakness in their financial condition and leaves them vulnerable to deposit outflows.