Jeffrey Kutler, editor-in-chief of Risk Professional magazine, isn’t surprised that bankers have balked at new regulation.  But if there’s still debate about whether or not the Volcker Rule would have prevented JPMorgan's trading losses in the London office “what does that imply about the overall quality of the reform effort?” he asks.

He’ll admit all regulations are prone to flaws, but "what was lacking in Dodd-Frank was more fundamental: an understanding of limitations and history," he writes.

To make his case he turns to book written by former hedge fund risk manager: "The natural reaction to market breakdown is to add layers of protection and regulation," he quotes from Richard Bookstaber’s "A Demon of Our Own Design." That author, now a an adviser to the U.S. Treasury Department  writes: "But trying to regulate a market entangled by complexity can lead to unintended consequences, compounding crises rather than extinguishing them because the safeguards add even more complexity, which in turn feeds more failure."

"Paradoxically, it may start with simplicity" Kutler says about finding an effective response. "The regulatory mind-set needs to be agile and expansive, not rigid and prescriptive."

For the full piece see "The Unintentional Consequences of Dodd-Frank" (may require subscription).