The M0/M1 distinction is irrelevant - banks buy cash from and sell cash to the central bank all the time based on how much they need. Banks borrow against asse

The M0/M1 distinction is irrelevant - banks buy cash from and sell cash to the central bank all the time based on how much they need. Banks borrow against assets all the time, and during a run that's what they'd do. "Illiquid" is just a word for little people as long as the bank is solvent.