Both bank insolvency and bank failure are major concerns for the bank's counterparties even if the bank still has a source of liquidity under insolvency.

For retail depositors, the expected loss on their deposits is the same whether the bank fails or becomes insolvent.

The rate of corporate failure during normal market conditions is the same for banks and for nonfinancial corporations.

As lender of last resort, a central bank provides capital to a bank in financial distress for the same reason whether the bank is considered "too big to fail" or "too small to fail."