Frank: Case against Wall Street reform '$2 billion harder to make today'

Rep. Barney Frank (D-Mass.), one of the authors of the Wall Street reform law, seized on the staggering trading loss suffered by JP Morgan Chase to defend increased regulation of the financial sector.

On Thursday, JP Morgan Chief Executive Jamie Dimon announced that trading activity in the firm's London office had gone bad and cost the firm $2 billion in six weeks.

In a statement Friday, Frank used the "regrettable news" to bolster the argument that the Dodd-Frank financial reform law is not hindering banks and is needed for financial stability. He noted that JP Morgan Chase previously estimated that complying with Dodd-Frank rules would initially cost $400 to $600 million.

"In other words, JP Morgan Chase, entirely without any help from the government, has lost, in this one set of transactions, five times the amount they claim financial regulation is costing them," he said. "The argument that financial institutions do not need the new rules to help them avoid the irresponsible actions that led to the crisis of 2008 is at least $2 billion harder to make today."

Dimon has established a reputation among Wall Street bankers as a vocal critic of the financial overhaul. In one widely publicized event, Dimon publicly criticized Federal Reserve Chairman Ben Bernanke for the slew of new restrictions on financial markets, arguing that they were hampering the economic comeback.

"Has anyone bothered to study the cumulative effect of all these things?" he said in June. "Do you have a fear like I do that when we look back ... that they will be the reason it took so long?

“Is this holding us back at this point?" he asked.

Bernanke assured Dimon that regulators wanted to strike a balance that allows for stable markets and healthy lending.