The CEO of JP Morgan Chase admits the timing of this stinks, just as the government is looking at how to implement new regulations spurred by the last financial crisis, we've got a new example of excessive risk.
JP Morgan Chase's CEO Jamie Dimon is dubbed the "King of Wall Street," but in an emergency conference call Thursday, Dimon admitted losing more than $2 billion in an embarrassing blunder.
"Obviously it puts egg on our face and we deserve any criticism we get, so feel free to give it to us," said Dimon.
"The fact that this happened now is just absolutely awful, it's outrageous what happened over there," said Sen. Barbara Boxer, D-California.
Boxer says the latest revelations will serve as a guideline for limiting the kind of speculation that banks can engage in.
Friday Sen. Carl Levin, D-Mich., who authored some of the new banking regulations said the loss is "a stark reminder of the need for regulators to establish tough, effective standards."
But former labor secretary Robert Reich isn't hopeful. He said, "Because Wall Street's lobbyist, including lobbyists for JP Morgan Chase, have succeeded in creating so many loopholes."
Reich says the Dodd Frank financial reform law has been eviscerated. And one of those leading the charge against bank regulations was Dimon; he has been an outspoken critic of lawmakers, saying that they don't understand his business. And in that conference call, Dimon admitted this debacle turns the tables.
"It is very unfortunate. It plays right into all the hands of a bunch of pundits out there, but that's life," said Dimon.
It does play into the widely held fears that even a supposedly well-run bank like JP Morgan Chase is betting to big, gambling with the entire American economy all over again. But will it lead to tighter controls?
"I think it's going to be very hard to get any change in the regulations between now and the election. I don't think you're going to get anything out of the Congress between now and the election," said ABC 7 News political analyst Bruce Cain from our Washington D.C. Bureau.
However, Cain says it does change the onus of the debate and could put Mitt Romney and those defending deregulation of banks much more on the defensive.
Romney has pledged that if he's elected, he'll repeal the Dodd Frank regulations. Dimon says the volatility at JP Morgan Chase could continue into the next quarter and that there could be another $1 billion or $2 billion in losses.