It’s a teachable moment, but what’s the right lesson? Already, the $2 billion-plus trading debacle at JPMorgan Chase has inspired a powerful storyline. Nothing has changed since the financial crisis, it’s said. Big banks remain out of control, gambling recklessly. If Jamie Dimon’s bank, reputed to be one of the best-managed, can get into trouble, what can we expect of the others? Government regulations and regulators need to be tougher to counteract bankers’ greed and incompetence.
The storyline is marred only by this: Everything in it is exaggerated, misleading or wrong.
Let’s take stock. Here are four propositions that defy conventional wisdom.