Doubts felt by creditors, particularly by depositors, about the quality of the bank’s assets (whether justified or not), can lead to a hasty withdrawal of the liquid liabilities of the bank and therefore to its insolvency (bank run). In order to prevent this scenario, the authorities have provided for liquidity requirements (ex ante) and deposit insurance schemes (ex post).
Gramm-Leach-Bliley realigned the law to reflect the existing realities of the marketplace and to permit banks to do more efficiently what they were already doing in costly ways.