The full details of JP Morgan’s trading strategy aren’t known, but Wallace Turbeville, a former Goldman Sachs investment banker and currently a fellow with public policy think-tank Demos, doesn’t buy the bank’s explanation that it was simply hedging. “How can you possibly lose that kind of money on a hedge?” he asks. “The answer is, they weren’t off setting risk. They actually took a risk position on their proprietary book.” The proposed Volcker rule would, in fact, ban hedging that creates new “significant exposures” to risk or reward. In Turbeville’s view, it’s likely JPMorgan’s trade would have violated this provision, though the definition of “significant” is open to interpretation.