The recent news of a trade-gone-bad creating a large $2 billion loss for J.P. Morgan Chase is the latest jab in the war of needles pricking away at investor confidence. With memories of the financial crisis of 2008, the flash crash in 2010, Japanese earthquake and tsunami in 2011 and the seemingly endless Eurozone troubles still fresh in our minds, the last thing we need is a lack of confidence in the soundness of our banking institutions.

Any loss with the word billions after it is a big deal. But, for a large institution like J.P. Morgan Chase, it is not even close to being big enough to bring the firm down. In fact, the estimates of the loss are still growing as the complicated, illiquid trade has still not been wound down, and some say the real loss could end up being $3 billion or $4 billion.

To put that in perspective, even counting a $4 billion loss, J.P. Morgan is still estimated to generate a $2 billion profit in the second quarter of 2012. So, shareholders of this large banking and investment conglomerate have a right to be angry, and there are already class action lawsuits being filed. But the bank will survive this fiasco, and I suspect CEO Jamie Dimon will likely retain his position.

Is the issue here a different one than just dealing with this loss or the future gains and losses which will surely occur? I believe the question we should be asking our representatives and senators in Congress is why a banking institution which has become too big to fail is allowed to pursue these aggressive trading strategies? Why should an institution which required taxpayer bailout funds to survive the 2008 financial crisis be allowed to risk it's future and potentially future bailout funds by taking excessive risk?

The Glass-Steagall act of 1933 required separation of banks from investment banks so that the potential for a losing trade or stock market fluctuations would not threaten the banking system we all rely on and would like to trust. Portions of Glass-Steagall were repealed in 1999, allowing for the merging of traditional banking activity in the same firm as investment banking and trading activity. Some experts blame the problems we experienced in the financial crisis to this merger of activities, and there have been some proposals to separate these activities again, reducing the risk of the next stock market decline or a failed trade from bringing down a major institution or the banking system.

I am very much a pro-business guy, but I believe it is an abuse of privilege for a bank to engage in activity which is risky and could result in using public funds (your money and mine) to save one of these large organizations. If you want to be in the banking business, then be in that business and make loans and issue CD's to make your money. If you want to be in the investment banking business and put capital at risk in the pursuit of profit, then choose that route and don't participate in traditional banking activities. If you agree, then a letter to your elected federal officials would not be a waste of time.

Tom Breiter is president of Breiter Capital Management, Inc., an Anna Maria based investment advisor. He can be reached at 778-1900. Some of the investment concepts highlighted in this column may carry the risk of loss of principal, and investors should determine appropriateness for their personal situation before investing. Visit www.breitercapital.com.