What drives bank liquidity creation?

A growing literature seeks to identify the factors that influence bank liquidity creation. While some studies focus on macroeconomic factors, others focus on bank-specific factors. In this paper, we examine the relative importance of different types of factors in driving bank liquidity creation. Using a panel of US banks, we find that fluctuations in bank liquidity creation are mainly driven by macroeconomic factors. Our results hold for banks in different size groups. [ABSTRACT FROM AUTHOR]