[zaroth]

There are two different definitions of the same word.

One is balance sheet insolvency, the other is cash flow insolvency.

But it’s two forms of the same thing! Cash flow insolvency is usually a result of holding illiquid assets that can’t be turned into cash. In this case the assets were perfectly liquid though, so it wasn’t just a cash flow insolvency.

The bank was reporting the future value of the bonds, the problem was the present value was much lower.