And don't tell me that JPMorgan's mistake is a company-specific issue. Bad hedge, nothing more, I have heard traders say. There are no systemic implications despite what others may be saying.
You've got to be kidding. At the very least, something is wrong with JPM's risk strategy. This is going to put more pressure on them to deleverage and de-risk, but it will likely mean more pressure on ALL banks to trade less.
Bottom line: less liquidity in the markets.
There will also be calls to speed up the Volcker Rule for everyone. JPM is supposed to be the best-managed bank — what does that say about the rest of them?
It goes beyond that, to the larger "too big to fail" issue. Analyst Richard Bove, I think, struck the right chord this morning in a note: "JPMorgan just gave those who want the big banks broken up an incredibly strong reason for doing so."
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