Christian Science Monitor

However, some financial experts say, how well banks are capitalized is hard to know because financial derivatives are accounted for off their balance sheets. Under the Dodd-Frank legislation, trading in sophisticated financial instruments is supposed to go through clearinghouses, which will make them more transparent. But that is just beginning.

“You have to be a forensic sleuth in order to know what’s going on,” says Mayra Rodríguez Valladares, managing principal and financial trainer at MRV Associates, a financial consulting firm in New York. “You can’t just download the latest financial report and see what’s going on with financial derivatives.”

In JPMorgan’s case, she says, it appears they were betting the economy would get better faster. But, she adds, “It is not clear what their strategy was.”