When Jamie Dimon, JPMorgan Chase & Co.’s CEO, confirmed in May that his bank had suffered more than $2 billion in trading losses, the flood of commentary quickly tapped into one of the most controversial components of the Dodd-Frank financial reform law: the so-called Volcker Rule. Named for former Federal Reserve Chairman Paul Volcker, who proposed it, that section of the law is intended to place prohibitions on proprietary trading and other risky bets at federally insured banks.
Dimon is a leading opponent of the rule, and no sooner did he issue a mea culpa than he lamented his bank’s “egregious mistake” because, in addition to everything else, it would give ammunition to regulators. Meanwhile, proponents of the rule have said the bank’s blunder highlights the need to restrict high-stakes trading with government-backed dollars.
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