Proposed Volker Rule would be Problematic for JP Morgan (NYSE:JPM)

JP Morgan has been quietly acquiring competitors over the last couple of years, through various mergers arranged by the government or through the investment bank itself. This has caused the overall size of the company to expand rapidly. However, the proposed Volker rule could be problematic from some recent acquisitions of the company. The most notable would include: the $1.7 billion agreement to purchase Sempra Energy's commodities trading business. The reason why this could be problematic is: if the proposed regulations become law; it will mean that the different mergers that took place over the last couple of years, (such as: the Bear Stearns and the Sempra Energy) would have to be divested. As the proposal, would prohibit the bank holding company from engaging in commodities trading. 

What this shows, is that JP Morgan has been quietly acquiring the weakest competitors during the recent financial implosion. This has caused the size of the company to become far larger than it was before the financial crisis began. As JP Morgan, could become another company that may be "to big to fail," at some point in time down the road. While it is still early, if the Volker rule becomes a reality this could help to prevent institutions from growing to the size that created the current economic situation. That being said; based on the approval of the merger by both European and Asian regulators, highlights what will more than likely happen is: a watered down version of Volker rule or no regulation at all.

Volker Rule, JPM, Sempra Energy, Commodities, Commdities Trading, To Big to Fail