Banks should be prepared to deal with unanticipated and correlated liquidity shocks, both for their own sakes and for the sake of the broader financial system. In other words, it is critical to have funding sources in place if such liquidity shocks occur. In some cases, an increase in deposits can provide a partial funding source.
In the face of significant economic uncertainty, historical data suggest that many savers may prefer to shift their assets to relatively safe bank deposits at the same time that cash-strapped businesses and a variety of investment vehicles need to draw down credit lines.