I would not find it surprising if bank liquidity was actually historically low, especially considering that many banks do maintain buffers _of the same covaried assets_ and that banks _induce covariance when they choose to use an asset class for liquidity_.

Maybe ZFRB was just a really, really bad idea.

Not anymore. Very few maintain this, JPM being the notable exception.

The only difference is that panic set in and there was a bank run, largely led by VCs telling startups to pull their money.