This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Is It Time to Break Up Big Banks?: Poll

Updated with additional information, analyst commentary.

NEW YORK (TheStreet) -- JPMorgan Chase's (JPM) $2 billion- trading fiasco has renewed the calls for tighter regulation of banks.

But some argue that the answer lies not in tighter regulation, but in breaking up the big banks.

JPMorgan said two weeks ago that its chief investment office had racked up over $2 billion in losses since the end of the first quarter, weeks after CEO Jamie Dimon had dismissed reports about the division's market-disrupting trading activities as a "tempest in a teapot."

Lawmakers have been demanding that the nation's biggest bank share more information about the nature of the trades that caused the massive loss.

The Commodities Futures Trading Commission has opened up an investigation into the trading loss .

A lot of the analysis is focusing on whether the bank's trades may have been in violation of the Volcker Rule, which has yet to be passed and is likely to be at least two years away from being implemented.

The Volcker Rule seeks to prohibit banks from proprietary trading, wherein they bet their own capital for profit. But the rule, in its current draft, makes exemptions for activities that banks describe as "legitimate hedging."

However, JPMorgan's recent loss, which it says stemmed from a botched attempt to hedge against a stressed credit environment, has critics arguing that there is a very thin, blurry line between hedging and speculation.

JPMorgan CEO Jamie Dimon himself admitted as much in the company's annual meeting. "We do continue to believe in the importance of being able to hedge risk as an institution," he said. "However, we also understand the need for rules and practices to ensure that hedging doesn't morph into something different. What this hedge morphed into violates our own principles."

Now, democrats and proponents of tighter regulation on Wall Street are calling on lawmakers to toughen the Volcker rule and do away with the loopholes.

Banks who have been lobbying Washington to rewrite rules to make them less stringent and buy more time for their implementation might find themselves on the losing end.

Republicans who have been arguing that Washington is over-regulating the banking system continue to push back on such ideas, arguing that the business is inherently volatile.

1 of 3

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,049.77 -72.24 -0.42%
S&P 500 1,991.03 -9.09 -0.45%
NASDAQ 4,549.9510 -19.67 -0.43%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs