Guide
Banks as Stores of Deposits
Bank deposits give customers liquid claims on a bank rather than segregated cash, while banks manage those liabilities as part of their funding, payments and liquidity operations.
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MarketReview author profile
Eric Baker
Trading and Quantitative Markets Contributor
ActiveEric Baker brings more than two decades of trading experience to MarketReview, including work with personal accounts and at a proprietary trading firm. He continues to follow and participate in markets, with a particular interest in the decisions traders make when outcomes cannot be known in advance.
His writing concentrates on process: estimating probabilities, sizing positions, comparing expected return with downside risk and deciding how much uncertainty a strategy can bear. He also draws an important distinction between decision quality and outcome. A winning trade may have been poorly judged, while a sound decision can still lose money.
Eric contributes to MarketReview’s coverage of active trading, futures, derivatives and quantitative decision-making. He explains numerical ideas in practical terms, while making clear that models and calculations are tools for managing uncertainty—not ways to remove it.
Areas of coverage
- Trading
- Market probabilities
- Quantitative decision-making
- Risk management
- Futures
- Derivatives
Published work
Latest work by Eric Baker
News, analysis and evergreen financial guides credited to this author.
Guide
Banks as Traders and Investors
Banks invest in securities, make markets, hedge risks and support client trading, but these activities serve different purposes and face different regulatory limits.
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Guide
How Banks Are Regulated
Bank regulation combines capital and liquidity requirements, ongoing supervision, deposit insurance and conduct rules to reduce the chance that a bank’s problems spread to customers or the wider financial system.
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Guide
How Banks Create Money
Commercial banks create most everyday deposit money when they make loans, but lending is constrained by capital, liquidity, funding, risk and borrower demand rather than a simple reserve-ratio formula.
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Guide
How Banks Operate
Banks operate by managing a balance sheet of deposits, borrowings, loans, securities, cash and capital while providing credit and payment services to customers.
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Guide
Who Does The Banking Sector Benefit?
Banking supports payments, saving and credit across the economy, but the gains are not shared equally among households, businesses, bank owners and the public.
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Guide
Derivatives
Derivatives are financial contracts whose value is linked to an asset, rate, index, event or other reference. They include futures, forwards, options and swaps used to hedge exposures,…
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Guide
Options
Options are contracts that create defined rights for buyers and obligations for sellers around an underlying asset, strike price and expiration date. Investors may use them to hedge…
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Guide
Futures
Futures are standardized exchange-traded contracts that let participants hedge price exposure or take a market view across commodities, stock indexes, interest rates and currencies. This page explains contract…
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