Banks don’t need that much liquidity unless some exceptional thing happens, like a bank run. SVB had enough assets to cover all the deposits. Problem was that

Banks don’t need that much liquidity unless some exceptional thing happens, like a bank run. SVB had enough assets to cover all the deposits. Problem was that they couldn’t convert those assets (long maturity treasuries) back to cash fast enough. Now there is a facility in place that lets you convert those treasury notes to cash as soon as needed.