Improved levels of confidence are yet to translate into an increased demand for credit, Lindsay Maxsted, chair of the board of Westpac, told the bank's annual meeting on Friday."Across our businesses, we are seeing welcome signs of improved consumer and business sentiment following the federal election and the easing of the Australian dollar," Maxsted said. "Stronger housing activity has already been well documented, as historically low interest rates have encouraged buyers."More interest is beginning to emerge from businesses as they think about investing again. This interest has yet to translate into real activity and new lending, but is a welcome sign."As a result, we expect a modest pick-up in lending growth throughout this year."Maxsted also used his address to pitch for a decrease in the intensity of bank regulation in the context of the forthcoming Financial System Inquiry."We need to be mindful of the extraordinary wave of regulation that has swept the globe following the GFC and that is already adding cost and complexity to our system," he said. "It is important to fully assess these changes and their appropriateness to our markets. "It is similarly important that these developments, along with their implementation timetables, do not carry with them unintended consequences or place our system at a comparative disadvantage to [that of our] international peers."Achieving an appropriate balance between regulation and efficiency is particularly important as the economy emerges from a period of below-trend growth."