Does the current situation of excess reserve imply failure of QE? Excess reserve @ Fed

In the past it was assumed that excess reserves should be kept around 0 and banks should be lending to each other as much as they are borrowing. The central banks would correct the negative or positive balance at the end of the day by lending or borrowing at premium rates, but that was only a short term solution.

Now we have 5 years of excess reserves at the Fed and a lot of articles about how banks don't care about cash deposits. 

Is this the failure of QE? The money being lent and given frivolously circles right back into the Fed in the form of excess reserve it seems.

Is this making it categorically impossible to raise real interest rates? Maybe interest rates could go up if a devaluation process was launched and inflation started climbing, but I'm more interested in understanding what makes the real interest rate move. 

Am I misunderstanding something or everything?
You ask a few questions. I'll try to generally answer them:


  Is this the failure of QE? The money being lent and given frivolously circles right back into the Fed in the form of excess reserve it seems.


No, the existence of excess reserves is not a reflection on bank lending. A significant fraction of excess reserves originate in money market mutual fund holdings. This is very clearly explained in Singh (2015):


  The interest rates in most of these markets are in the range of zero and 25 basis points (bps). The Federal Funds (FF) rate or policy rate has been around 10–15 bps since the crisis, and is largely a negotiated rate stemming from the excess cash balances of nonbanks such as GSEs (i.e., Fannie Mae, Freddie Mac etc.), and banks. Only banks have access to the 25 bps interest on excess reserves (IOER) and thus arbitrage by depositing nonbanks cash at the Fed.


The reason for nonbanks' extra cash showing up as the excess reserves of banks is that it flows through money markets to the Fed because it allows banks and nonbanks to split the 25bps IOER. Singh again:


  The Fed’s balance sheet increased from roughly \$1 trillion (end-2007) to over \$4 trillion by end-2014, owing mainly to some \$3.4 trillion of asset purchases that sit on its asset side. The approximate corresponding entry are excess reserves of \$2.9 trillion on the liabilities side— these are deposits of nonbanks (who sold assets to the Fed) at banks, who then place them as deposits at the Fed. Since October 2008, the Fed offers banks 25 basis points per annum for their deposits (including excess deposits over the required reserves), but pays zero interest on deposits from nonbanks, especially GSEs.


As I note in the discussion in the comments, zero dollars of QE were "lent" or "given"— QE consisted entirely of purchases of government and agency securities on the open market, at market prices. What QE does is change the mix of "safe assets" versus cash. There's nothing "frivolous" about it.


  Is this making it categorically impossible to raise real interest rates? 


Due to the payment of interest on excess reserves (IOER) and the creation of the Reverse Repurchase Program (RRP), the existence of excess reserves does not prevent the Fed from raising real interest rates. As noted above, IOER effectively provides a reason for banks to continue to borrow funds from money markets by subsidizing them at a fixed rate, while RRP provides a floor under risk-free rates (by providing a place to park excess collateral at a positive rate, independently of the supply of collateral at dealers banks) that is under the control of the Fed.

Real interest rates are low because the FOMC has decided not to raise them yet for policy reasons.