Was JPMorgan Chase's $2 Billion Blowup Avoidable?

The following video is part of our "Motley Fool Conversations" series, in which financial and economics sector head Ilan Moscovitz and consumer goods editor and analyst Austin Smith discuss topics across the investing world.

JPMorgan Chase is under fire after it recently announced it expects to lose $2 billion on a complex derivatives trade. It's impossible for a bank with heavy trading activities to be loss-free, but was this particular blowup avoidable? It very well might have been, given the specifics of the trade and how unnecessary speculation actually is to the commercial banking model.

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At the time thisarticle was published Austin Smithand Ilan Moscovitz have no positions in the stocks mentioned above. The Motley Fool owns shares of Bank of America, Citigroup, and JPMorgan Chase.Motley Fool newsletter services recommendGoldman Sachs Group. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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