It's not, like, a big secret that the principal of long dated treasuries fluctuates more when rates move. The thing is that banks don't look at these as someth

It's not, like, a big secret that the principal of long dated treasuries fluctuates more when rates move. The thing is that banks don't look at these as something with a market value. Instead it's an instrument that guarantees a certain interest payment every month, which will not change until maturation. In that sense the treasuries were extremely safe and reliable and didn't stop functioning. It's just that whole bank run thing forced a recharacterization of the assets as something that could have risk.