The $2.3 billion unauthorized trading loss at UBS last autumn would be one such. The rape accusation against former IMF head Dominique Strauss-Kahn would be another.
But the announcement that JPMorgan had mislaid $2 billion and counting because of a hedging mishap is in a league of its own.
Why do I say that? Partly it is because of the repercussions for JPMorgan and partly because of the repercussions for the industry. Essentially, this loss makes the universal banks and investment brokers uninvestable. If the supposed best in breed can go so spectacularly awry, who knows what lurks under the hood at other, less well-managed firms?
For some months now the US banks had been covertly lobbying against the rigid imposition of the Volcker Rule. This rule, meant to come into force this summer, aims to separate proprietary trading from customer activity at US federally insured banks. After the JPMorgan stunt, regulators’ fangs have been sharpened: there will be no escaping their elongated tentacles.
Just as the burgeoning shareholder spring probably marks the end of excessive chief executive compensation, so the JPMorgan loss probably marks the end of freewheeling, high-noon investment banking and ushers in an era of utility-like activity where banks finally accept that they are the servants and clients are the masters.