The debate over systemic risk oversight in the U.S. is shaping up like a heavyweight fight. Instead of the championship belt and huge purse, at stake in this match are fundamental checks and balances on too-big-to-fail institutions.

If it were a boxing match, one might think the 6'8" Volcker could put quite a beat down on the much slighter Dimon, but this is not a hand-to-hand fight.  Nor is it about whether Volcker or Dimon is more trustworthy or virtuous than the other.  They are both men of high distinction in finance, worthy of respect in an industry that lacks integrity and stewardship.   

Rather, it is the battle of Rule versus Principle and whether more strict and formal rules are the only serious solution to containing too-big-to-fail institutions.  Amidst this match is the question that Wall Street and Washington have been unable to answer for the investing public since 2009: "Have you done anything to ensure that taxpayers will never again be on the hook for a financial industry gone mad?" 

In one corner, weighing in at 298 pages and having an extensive reach, the Volcker Rule seeks to strictly limit the amount of risky proprietary trading by banks.  It was proposed months ago as part of the Dodd-Frank Act and has been debated more than implemented.  

In the other corner, weighing in as spoken word and looking more like general concepts than rules, is the Dimon Principle. Its supporters suggest banks do not need complex rules and limits, that they can and will monitor and control trading risks on their own.  

Do not expect a clean fight. 

This battle of titans has been simmering since the financial crisis erupted more than four years ago.   And, investors' ability to handicap this conflict and set the odds on an outcome got very cloudy this past month.  

Earlier in the year, the Vegas odds would have favored the Dimon Principle, attended to by a veritable army of industry lobbyists who demanded fewer trading limits and unfettered commercial flexibility to hedge and trade for customers.  This group continues to assure regulators and the public that banks can be trusted to keep the system safe and that they learned their lessons from the credit crisis.  

But the Volcker Rule gained new life in April as Main Street was barraged with not only bad markets, but one ethically foul-tasting circumstance after another, beginning with former Goldman Sachs director Rajat Gupta's trial for leaking insider information.  The judge hearing the matter was incredulous, lamenting that "the most disturbing thing about this case is what it says about business ethics. It's not a case of one bad apple, but a bushel-full." 

But wait, there is more. May was plagued with the greatly acclaimed but ethically second-rate Facebook IPO. Investors scurried to get a piece of the most over-hyped initial public offering in history only to hear just hours later that weaker business prospects may not have been fully disclosed to all buyers. 

However, May's coup de grâce was JPMorgan's very own public flogging over exotic derivatives trading, eerily reminiscent of the 2008 crisis. It not only dented public trust, it actually gave rise to one of our main protagonists, the Dimon Principle.

Perhaps the "principle" was floating around for years, but in the words of the man himself, the recent risky trading and failed risk management oversight of the derivatives trades at JP Morgan violated the Dimon Principle. We take that to mean it violated his personal, self-imposed, principles of high professional conduct. 

This month, the CFA Institute (where I work) and the Pew Charitable Trusts announced that they have joined forces with former FDIC chair Sheila Bair to launch the Systemic Risk Council to hold the Financial Stability Oversight Council to its mission. Though created in 2010, the FSOC has been slow to act, accomplishing little in the way of realizing its mandate of helping policymakers better understand and address systemic risk, despite the critical need for meaningful and timely action. By helping create the SRC, we have stepped forward to protect taxpayers and investors while the fight between principle and rule continues.

Can the industry have both the Dimon Principle and Volcker Rule? I know many households that use both rules and principles for controlling behavior.  For example, my parents strictly enforced a 10:00 p.m. curfew on school nights.  As I earned my parents' trust and demonstrated conscientious behavior, my 10:00 p.m. curfew became "be home at a reasonable hour" and "be careful."   

If JPMorgan and its contemporaries are still up to their old monkey business and continue to ignore risks in the financial system, then their principles are not working. Whether the trades-gone-bad would (or should) have violated the Volcker Rule is now the more vexing question.  

With all due respect to Dimon and his principled vision, regulators should consider whether trust in mega financial institutions has been earned. Even then, when it comes to too-big-to-fail and systemically reckless behavior, is too much at stake?

Sound the bell for the main event.

Kurt N. Schacht is the managing director of the standards and financial market integrity division at CFA Institute.