"This is a direct transfer of risk to the taxpayer done by the bank without approval by regulators and without public input. You will also read below that JP Morgan is apparently doing the same thing with $79 trillion of notional derivatives guaranteed by the FDIC and Federal Reserve."
No, this may not have threatened the overall soundness of this particular bank - this time. The illness may not have killed the patient, but the disease goes merrily on.
The banks want to have their cake and eat it too. They want to continue gambling with depositors' money in one risky, high-stakes crap shoot after another. They pay lip service to "market corrections" but the reality is far from a free market economy. The banks are continuing to pocket their wins and socialize their losses. Wonderful racket for Jamie Dimon and his ilk, but the American taxpayer is still being told to bend over.