They provide a better return for those who own bonds and other interest-bearing securities but increase the costs to businesses, those buying homes and other borrowers.
There is a belief among many investors that excess returns can be earned in the market by owning stocks for only 6 months out of the year and sitting the rest of the time in interest-bearing Treasury securities.
As I explained in a book I co-authored some time ago, in an environment like this bankers have grown up as abacus bankers, record keepers of money flows who derive income from seigniorage, from the passive creation of money through interest bearing-loans and government-backed securities rather than from true banking, and from active risk management.