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Greenspan On JPMorgan's $2 Billion Trading Loss: 'So What?' (JPM)

Reported by Business Insider on Friday, 8 June 2012 (on June 8, 2012)

Greenspan On JPMorgan's $2 Billion Trading Loss: 'So What?' (JPM)

No finance expert can get by without being asked about their thoughts on JP Morgan's $2 billion (and counting) trading debacle ext

.

CNBC's Maneet Ahuja caught up with Alan Greenspan ext

, former Chairman of the Federal Reserve and Ben Bernanke's predecessor.

"So what?" said Greenspan commenting on the matter.

He noted that the loss was just basically peanuts compared to the bank's nearly $200 billion in equity.

More from Ahuja ext

:

“My point is that you have to recognize that banks will lose money on occasion,” Greenspan said, “because that’s the way the system eliminates unproductive capital. Implicit in creating growth and productivity comes some degree of failure. If you have banks that are ‘too big to fail’, it implies you are using the government as a buttress to prop up otherwise unproductive failing institutions."

Greenspan makes a good point. JP Morgan ext

hasn't exactly come screaming for a bailout.

However, the question remains: what if something like this happened at a less stable bank?

*SEE ALSO: New Details On The Cardplaying Chessmaster Who Bagged JPMorgan's London Whale > ext

*

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