When this happens to a bank, the FDIC should step in, make the bank liquid again (perhaps by trading the bonds and other investment products for cash), evenly pay out every customer with whatever there is, pay up to $250,000 per customer for the shortfall, if there is any. If there was no shortfall, pay out to investors/debtors. Then shut the bank down.

I think a lot of people perceive the bank as having zero assets and the FDIC is covering 100% of the deposits. Some $200B or whatnot. But most of what people deposited didn’t just vanish.