That’s not true. If it were true they’d have sold those assets, paid depositors, and still be operating.

Instead what happened is they couldn’t sell the assets without causing prices to go lower, so instead the government started an emergency facility which allows for assets to be paid at par, and they will charge fed fund rate to do that.

In other words an $80bln book earning 2% will now get paid out at par but their will be a bill for 4%.