JPMorgan Loss And Volcker Rule

Advocates of tighter restrictions on proprietary trading see bank’s loss as ammunition.

U.S. lawmakers and interest groups favoring tighter restrictions on proprietary trading said JPMorgan Chase & Co.’s $2 billion loss on synthetic credit securities bolsters their case.

Senator Carl Levin, the co-author of the so-called Volcker rule and chairman of the Permanent Subcommittee on Investigations, said the New York-based bank’s disclosure yesterday served as a “stark reminder” to regulators drafting the proprietary-trading ban required by the 2010 Dodd-Frank Act.

Self-Inflicted Losses

JPMorgan Chief Executive Officer Jamie Dimon said that while the losses were “self-inflicted,” they may not have run afoul of the rule and don’t weaken arguments against the proposal.

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