Editorial Board

Whale Hunting Isn't Fed's Job

Regulators can't prevent banks from doing dumb things, but they can and should protect the economy from the consequences.
Regulators can't protect banks from making mistakes.

A government auditor has criticized the Federal Reserve for failing to prevent the 2012 "London Whale" fiasco at JPMorgan Chase & Co -- a series of bad trades that ended up costing the bank more than $6 billion. The audit may be right on the facts, but the premise is questionable. Regulators can't be expected to stop banks from making bad decisions that cost them money.

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