Bill Loving, chairman of the Independent Community Bankers of America (ICBA) and president and CEO of Pendleton Community Bank in Franklin, W.Va., and Camden R. Fine, president and CEO of ICBA,  issued this statement following the Senate Permanent Subcommittee on Investigations report that JPMorgan Chase used federally insured deposits for high-risk trades that resulted in hundreds of millions of dollars in losses it hid from regulators and taxpayers.

“The Senate Permanent Subcommittee on Investigations report on JPMorgan Chase demonstrates the dangers of subsidizing too-big-to-fail financial institutions. Not only did JPMorgan use federally insured deposits to fund a portfolio of complex financial instruments used for high-risk, short-term trades, it misinformed investors, regulators, lawmakers and taxpayers about the nature of the ‘London Whale’ losses.

“This failure of oversight and risk management is yet another example of the moral hazard and reckless risk-taking that results when financial institutions are so large and complex that they enjoy an explicit government guarantee against failure. JPMorgan took significant risks with its $157 billion portfolio of synthetic credit derivatives funded in part with federally insured deposits, hid its losses, and dodged the limited regulatory inquiry that followed.

“Combined with recent testimony from U.S. Attorney General Eric Holder that the size of too-big-to-fail financial firms inhibits Justice Department prosecutions on Wall Street, the nation is again witness to the fact that the largest and most complex financial institutions play by a different set of rules than the rest of us. Too-big-to-fail and too-big-to-jail megabanks should not be allowed to operate above the law and engage in highly risky and complex financial gambles with the support of the federal safety net, while too-small-to-save community banks are left to pick up the pieces on Main Street.

“The nation’s financial institutions should be required to operate on a level playing field. Too-big-to-fail and too-big-to-jail financial giants should be downsized and split up to reduce systemic risks, restore accountability in our financial system, and provide for a safer and more economically sound financial system.”