JPMorgan's $2-billion loss a gift to Volcker rule proponents NEW YORK - JPMorgan Chase & Co."s stunning $2-billion loss serves as a "wonderful poster boy for the Volcker rule," a leading securities law expert said. "Banks that are too big to fail can't be allowed to lose their shirt," Columbia Law School professor John Coffee told The Times. "The Volcker rule faces overwhelming opposition in the financial community, but this is sort of a poster boy for just what can go wrong," Coffee said. The Volcker rule, named for former Federal Reserve Chairman Paul Volcker, refers to a provision of the 2010 Dodd-Frank financial reform law that aims to curtail speculative trading by banks. Risky bets by banks, using firms" own money, has been blamed for causing the 2008 financial crisis. JPMorgan made its disclosure following the close of Wall Street trading on Thursday afternoon. That was just in time for the embarrassment to become fodder on Capitol Hill, where the Volcker rule has been subject of a fierce debate. JPMorgan Chief Executive Jamie Dimon -- himself a critic of the Volcker rule -- acknowledged the inopportune timing in his late-afternoon conference call on Thursday, noting it played right into the hands of critical pundits. Coffee said an earlier poster boy for the Volcker rule was the collapse of MF Global, the commodities brokerage headed by former Goldman Sachs chief and former New Jersey Gov. Jon Corzine. JPMorgan apparently was making big bets against hedge funds involving sovereign debt, which Coffee noted was a zero-sum game. "Someone is always going to lose, and if the party that loses is a bank that's too big to fail, either we'll have a general financial panic or we'll have a bailout that no one wants," Coffee said. The heated-up Volcker rule debate comes as some have suggested breaking up the country's biggest banks in the interest of financial stability. As economist Simon Johnson recently noted in the New York Times, the idea appears to have gained some traction. But Coffee thinks making the big banks smaller isn't feasible. "I don't believe in breaking up the big banks," Coffee said. I believe in making them considerably more boring. JPMorgan's shares were down sharply in early trading on Wall Street. The bank's stock was down $3.29, declining 8%, to $37.45 a share. Stocks fall following JPMorgan's stunning $2-billion loss JP Morgan stock plunges after hours on 'egregious' trading losses