The study shows that the liquidity of banks is influenced by the liquidity of asset markets like stocks and Treasury bonds. Stock market liquidity has a bigger impact on bank liquidity creation than credit-spreads or Treasury bond market liquidity. Larger banks are more affected by asset market liquidity and credit-spreads, while smaller banks are more influenced by the Federal funds rate. Off-balance sheet liquidity creation is better explained by stock market liquidity, while on-balance sheet liquidity creation is more affected by short-term off-the-run Treasury bond liquidity.