Restricted liquidity refers to assets that are inherently liquid but cannot be used by the bank to meet immediate liquidity needs because they are encumbered or pledged for other purposes. US Treasury notes are highly liquid assets, but when they are pledged as collateral against a loan, they are legally encumbered and cannot be sold or used as a funding source until the loan is repaid or substitute collateral is provided. Therefore, they represent restricted liquidity. Options A and B represent primary or unrestricted liquidity. Option C relates to assets isolated in an SPV which are not readily available to the bank, but D is the definitive textbook example of restricted/encumbered liquidity.