Selling the banks' holdings of T-bills is an example of using stored liquidity to meet a deposit withdrawal.
A company's liquidity is its capacity to convert assets into cash or to get cash through a loan or funds in the bank to settle its short-term liabilities or obligations. Liquidity, in its simplest form, is the ability to swiftly transform something into currency while maintaining its worth.
An asset's liquidity refers to its capacity to be swiftly sold or swapped without influencing its price. Liquidity, then, is a measure of how quickly an asset may be turned into cash. Treasury bills are liabilities for repayment of debt that are issued by the US Department of Treasury. All of the debt that the federal government has issued has a maturity date, but T-bills have the earliest.
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