To sell the bonds now would mean they get sold at significant loss. If they can be held until mature they will be worth a lot more.That is the narrative being pushed. In reality the bonds are not worth what SVB needed them to be worth to remain solvent. It wasn't an issue of liquidity but of a bank run forcing unrealized losses to become realized losses. SVB didn't have the assets to cover deposits. If SVB sold every asset they had for what it is worth, they could not make everyone whole.
The government is going to step in and make all SVB depositors whole. Biden says the FDIC payments will cover that cost but the FDIC payment are insufficient because they were set up to only have enough to cover $250k per depositor. The government has no choice. They have to make everyone whole and taxpayers will cover the gap.
The interest rate of government bonds is a problem but it is not *THE* problem. How many mortgages do you think are fixed at an interest rate below 4%? Nearly every bank in the country is sitting on a massive pile of loans with fixed interest rates lower than the current rate of inflation, and they lose money on those loan every day but so long as they don't sell the loan off, the loss is considered "unrealized". Nearly every bank is in the SVB boat and a run anywhere could crash any of them. So we get a lot of comforting happy talk.
Again, I'm not going to pretend to know a whole lot here.