“Mitt Romney will probably have a harder time defending his intent to repeal the 2010 Dodd-Frank Wall Street reform law in the wake of JP Morgan’s stunning disclosure that it lost at least $2 billion betting on the economy.”

“But it also raises important substantive questions about the effectiveness of the new financial reforms themselves, particularly the one provision specifically intended to end just this sort of trading.”

“On a Friday conference call with reporters, Sens. Carl Levin (D-MI) and Jeff Merkley (D-OR) criticized regulators for writing a major loophole into the so-called Volcker Rule — meant to prevent banks from betting with depositor funds — at the behest of financial interests.”

…

” ‘Too-big-to-fail banks like JP Morgan, with trillions in assets and trillions more in high-risk investments and trading, require regulation and transparency,’ said Dennis Kelleher, president of the advocacy group Better Markets, who is calling on the Department of Justice to appoint an independent counsel to investigate Morgan and Dimon. ‘This is yet another example of the need for the more than $700 trillion derivatives market to be brought into the light of financial regulation. That is the only thing that will reduce the risk these banks pose to the taxpayers, the financial system and the economy.’ “

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Read full Talking Points Memo story here.