As shown here previously, there is a direct correlation between the excess reserves created by the Fed, and the cash holdings of domestic and foreign banks (operating in the US) disclosed by the Fed's weekly H.8 statement. So with the Fed's reserves reaching new all time highs with every week courtesy of the $85 billion in monthly flow injected by the Fed...
... some wonder where is this cash ending up. The answer: in the week ended July 31, a record $1,157 billion was parked with foreign banks in the US, while "just" $1,112 of the Fed's created reserves was allocated to US banks.
This breakdown is shown in the chart below:
Or, in short, the Fed's QE-created reserves have gone to:
- Foreign banks: 51%
- Large-domestic banks: 36%
- Small domestic banks: 13%
At least someone is benefiting from the Fed's generosity, in that order.