Even with all the focus on JP Morgan’s loss bomb in the past few days, some critical elements of the story have not gotten the scrutiny they deserve. By way of background, Amar Bhide, who is currently a professor at Tufts, has run a prop trading operation (admittedly some time ago) and has written extensively both on the financial services industry and entrepreneurship.

Bhide takes issue with Dimon’s description of the funds that the Chief Investment Office (part of the bank’s treasury function) as “deposits” but rather as market funds. He also contends that no one can be running a major risk-taking trading operation along with a huge, sprawling international bank. A major trading operation requires that senior management be on top of position risks, and the organizational and operational demands of running a super big bank make that impossible. Finally, he argues that the risks JPM and other banks are taking are much greater than is commonly recognized, and JP Morgan’s profit level in the face of unfavorable conditions for financial firm is proof of unduly high risk levels.

This post originally appeared at naked capitalism and is posted with permission.