The banks have always needed capital, not liquidity.  And now it seems like the treasury is prepared to invest directly in the banks.

As brief as I can be:

Banks hold lots of assets (like deposits).  They then use these assets to make loans, providing the vital financial lube.  Banks can usually lend out 10 times their assets without any problem (notice how bank runs are so terrifying to an economy).  This crisis came about because banks had billions in mortgage backed assets.  When home prices declined, the assets declined in value.  Banks still had the same amount of outstanding loans, but with lower assets.  (Investment banks like Bear and Lehman had like 35 times more debt than assets)  The way to rectify the situation is for the bank to raise money, and return to a good loan-to-asset balance.  Banks raise money by selling new stock.  This hurts current shareholders by diluting their ownership share, and has been highly resisted, but it is the only way to get banks the capital footing they need.

If they won’t do it on their own, maybe they will be forced to.  This power of the treasury, to invest directly in banks, was one of the ones added to bailout after it went around the second time.