As I understand it, here's a very simplistic explanation of what happened with Silicon Valley Bank.

[LuckyCharms]

58. Agree.

The problem is not that the bonds are illiquid...they are very liquid.

I guess by "finding a buyer", I was implying "place an ask in the open market".

So days until settlement would not be the problem, and I may have over emphasized that.

The problem is that they are selling the bonds at a loss.

With regard to settlement though, individuals and businesses expect to be able to walk into a bank and pull out their money instantaneously. Literally walk up to a teller and ask for their money. And get their money, that very second.

Now, I'm not sure if a one day settlement in actuality affects a delay in receiving funds. I'm not that familiar with the mechanics of settlement.

Regardless, a seed was somehow planted with regard to the fact that bonds had to be sold to pay out a cascading amount of people withdrawing their money. If there was any kind of delay or caveat when a depositor went to get their money, that's going to snowball and cause a run.

I'm also wondering about snippets I am reading that some entity, perhaps a hedge fund, put a bug in the ear of some bank customers that the bank is in trouble, and is taking a huge loss on their bond sales.