By Jessica Toonkel
NEW YORK, June 11 (Reuters) - Veteran banker Sallie Krawcheck believes regulators and pundits are missing the point when they debate JPMorgan Chase & Co's recent trading loss.
In May, JPMorgan disclosed its London office had executed a failed hedging strategy that produced at least $2 billion in trading losses. The news of the loss caused many to question whether banks are still taking too many risks following the 2007-2009 financial crisis.
But a $2 billion trading loss, even if it turns out to be a $5 billion loss "is a long afternoon in terms of amount" for JPMorgan, Krawcheck said in an interview with Chrystia Freeland on Reuters TV.
"This company can absorb a $2 billion or $5 billion loss ... no problem whatsoever," she said.
The real question, Krawcheck said, is not whether JPMorgan can absorb the loss or why it the bank was making such trades, but rather why it was not caught sooner.
"The point is that this loss took them a long time to get to the bottom of ... and this is an outstanding management team that runs a stellar bank," she said.
The trading loss exposes a different problem: that banks the size of JPMorgan are too complex, she added.
Krawcheck, who was ousted in September as head of Bank of America Corp's wealth and asset management division, knows plenty about the complexities of big banks. Before joining Bank of America, she also ran Citigroup Inc's Smith Barney brokerage network.
"When you start to look at something like this you say 'this is a sign of complexity'," she said. "Isn't the core issue that we want banks to take x amount of risk off the table?" (Reporting By Jessica Toonkel; Editing by Andre Grenon)