Determinants of banks’ liquidity: A French perspective on interactions between market and regulatory requirements

•We shed light on the interactions between bank liquidity, bank solvency and market liquidity within a theoretical framework and using a Dynamic Common Correlated Effects Mean Group Estimator.•We estimate the determinants of the “liquidity coefficient" implemented in France ahead of Basel III Liquidity Coverage Ratio using a panel data set of more than 350 French banks.•We show that in times of crisis, measured by a financial variable capturing international markets’risk aversion, French banks actually decreased the liquidity coefficient.•While bank solvency seems to have a positive effect on the liquidity coefficient, causality is not firmly established based on Granger causality tests.