JPMorgan Chase discloses $2-billion trading loss

Funkenpants wrote:

In the modern usage, a bank is a gambling machine that does a little lending on the side. That's really what's at stake in D.C. We need to split the speculators off from the bankers. Speculation is considered necessary for the financial system to function, but we don't want more bailouts of speculators who make bad bets.

The only difference now is that banking is less risk averse. Banking has always been and always will be placing bets with other people's money to a certain degree.

boogle wrote:

Banking has always been and always will be placing bets with other people's money to a certain degree.

True, but there's a difference between making a secured loan, or one that is personally guaranteed, than simply placing a bet on an outcome of a future event in the financial markets. Trading isn't lending. It's taking temporary ownership of an asset in the hope that future events will raise the price of the asset or that other traders will decide the asset is underpriced.

Banking and trading are two separate businesses that are run differently and don't need to be combined. In fact, they shouldn't be combined because of the need to keep the banking system highly regulated.