I'm a bit confused. (Haven't followed in detail) Did they not mark to market the bonds they bought and ended up insolvent in reality but not in their books? Sho

I'm a bit confused. (Haven't followed in detail) Did they not mark to market the bonds they bought and ended up insolvent in reality but not in their books? Shouldn't the regulators have pulled the trigger earlier, then? Or is this just a liquidity issue and the bank is solvent, but the assets need to be sold?