That's a liquidity crisis, not insolvency. They were invested in long term matur...

dwater · on March 11, 2023

All they had to do was freeze withdrawals for 10 years and it all would have worked out fine.

doubleunplussed · on March 11, 2023

Right. But that is exactly the distinction between being illiquid and being insolvent.

JumpCrisscross · on March 11, 2023

> a liquidity crisis, not insolvency

Ish. On a mark-to-market basis they had insufficient reserves. That's closer to insolvency than illiquidity. The mismanaged duration is closer to illiquidity. But not of the sort a lender of last resort could save them from.

OJFord · on March 11, 2023

No it isn't? Not having access to enough quickly enough is a liquidity crisis; not having enough even when it is all liquidated is insolvency.

readthenotes1 · on March 11, 2023

The income from them is safe, but the value of them is not.

Same with their mortgage-backed securities.