[dragonwriter]

> Any bank will hit liquidity issues on a full-on bank run, as not 100% of a banks assets will be marketable, but central banks will provide emergency liquidity in these situations

That was not the case in the US for banks with HTM assets until the backstop program announced by the Fed in the wake of the SVB collapse.

> But banks should not hit insolvency issues like SVB did

SVB’s liquidity issues turned into solvency issues because of the absence of a liquidity backstop.

[evancox100]

Treasuries are some of the most liquid instruments available, it is not a “liquidity” issue like “How do I line up buyers for all these weird, hard-to-price assets”.

And the measure put in place by the Fed is not a liquidity back stop, it is a value/solvency bailout, or kind of capital infusion. This is what SVB was trying to do on Wednesday, raise capital. That should tell you it is not a liquidity problem.

[s1artibartfast]

I think you may be confusing FDIC actions.

One of the actions was a program to loan against the full value of long term assets at term price instead of current market value.

Maybe we are just quibbling over the definition of liquidity. long term treasuries and MBS can be easily sold, but you may take a substantial loss in doing so instead of holding to maturity.

[evancox100]

Not confusing the two, and maybe it is quibbling but changes in market value have nothing to do with liquidity as that term is used in finance.

Just because you can't sell a bond at par doesn't mean it is an illiquid market.