From the perspective of the corporate profit and loss statement, a trading loss is one expense item in the context of all revenues and expenses. So $2 billion should be compared to the bank's $26.7 billion in pretax profits for 2011, suggesting a reduction of something less than 10 percent in annual profit.

The $2 billion loss at JPMorgan Chase (JPM) has reopened debate on the Volcker rule. The proponents of the rule have seized on the story as proof that the Volcker rule is necessary and should be quickly put into effect by regulation. In reality, however, if the facts are as thus far reported, what happened at JPMorgan is proof that the Volcker rule is unworkable and should be repealed. 

It’s depressing to watch, but it is missing the point that the Volcker rule would not have prevented the loss and is probably unworkable.

American Enterprise Institute economist Peter Wallison explains why the recent JP Morgan losses are proof that the Volcker Rule is unworkable and should be abandoned.

Prohibiting their bond trading will seriously weaken banks and the markets that banks supply with liquidity.

In November 2011, the OCC, FRB, FDIC, and SEC issued a530 page joint proposal to implement Section 619 of the Dodd-FrankAct (the "Volcker Rule") to bar banking entities and their affiliatesfrom engaging in short-term proprietary trading. 

On the heel of the recent JP Morgan fiasco, American Enterprise Economist John Makin makes the case for how Dodd-Frank is an insufficient guarantor of financial stability.

If we hope to have a viable banking industry in the future, the Volcker Rule - among many other provisions of the Dodd-Frank should be revisited now.