There is the run from ‘can’t liquidate fast enough’, and there is the run from ‘can liquidate fast enough, but don’t have enough value if they do’.

The first one any bank is susceptible to, the second one is a bad bank issue - and it means that any sustained rate of deposit outflow is going to eventually implode it, as they’ll run out of value at some point regardless of how slow the draw down is.

That’s because that second scenario is essentially forced ‘mark to market’, which unlike ‘stress tests’ and regulator driven accounting standards, can’t be gamed. That’s the real issue here.

SVB was in the last category, but everyone is pretending it was in the first category because this problem is systemic due to fed reductions in interest rates for so long. We’re trying really hard to not look behind the curtain because it’s too scary.

The really interesting thing is easy fed cash has caused this issue globally. Global interest rates have been suppressed everywhere the USD touches, even China. Now that they’re ending, the bill coming due is a global one.

That’s why the fed is willing to take all these bonds at par for cash - they recognize they created this mess and don’t want it to spread, as it will implode the system and break the orderly turnaround they are trying to accomplish.

Pain spread over years in ways the system can absorb without causing an out of control spiral is the goal. Retirees eating dogfood (or starving), and mobs of angry unemployed 20 something men burning cities are the thing they are trying to avoid.