The role of trust on liquidity creation is at the heart of banking theory. While Diamond and Dybvig (1983) argue for a positive effect of trust on deposits, which would result in more liquidity creation, Diamond and Rajan (2001) posit that it is because banks should elicit trust through a fragile capital structure that liquidity is created. From that perspective, excessive trust would undermine liquidity creation. We investigate the impact of a change in trust on liquidity creation. We employ Berger and Bouwman's (2009) liquidity creation measure and Gallup survey data to measure trust. Our results support a positive effect of trust on liquidity creation. This is especially the case when trust plays a crucial role, for small banks, state-chartered banks, and during economic downturn Our results are robust to alternative measures of trust and potential endogeneity concerns.