MarketWatch says:
They now face a regulatory environment so strict that many are afraid to lend, even to customers with the most pristine credit. They’re still paying up for misdeeds done during the bubble. There’s essentially no private bond market to whom to sell mortgages.
Regulation, and its cost is going up. That is what Yellen's trying to fix in a backhand way. Do not become a regulated depository institution, get a great big vault and collect high denomination bills.
But, banks need a big enough stack of paper to pay the government stacking costs, they need economies of scale. Negative rates are all about charging folks with small stacks a fee, they are inefficient customers.
How does banker bot handle this?
Bet on the height of paper in the large vaults. Every quarter Treasury reports on the amount of ink and paper used. We bet that number, we invite the paper stackers to reveal their paper pile, we pay for their inside information. Eventually the collection of banker bots have a representative sample of paper stack height. Insider/Outsiders; encode/decode. The encode are the representative sample, outsider information. Go ask the kids at Caltech how this works. But I think the insiders are fermion and the outsiders boson, freely traded.
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