Because holding cash costs money, you need to have a big place to stash it and keep it secure. Some banks are trying to do that though, but it is not easy to do in scale of billions.
Banks hold their excess reserves at the Federal Reserve[0] and receive interest on top, currently 2.35%. Scales up to at least a couple trillion give or take a few hundred billion.
European banks hold their excess reserves (or at least their required minimum reserves) at the European Central Bank or their country's central bank; all of which are currently charging interest for the privilege.
