Like many closed societies, the financial industry thrives on jargon and obscure acronyms. Back in 2009, TARP and “Too-Big-To-Fail” (TBTF to insiders) became household concepts, mostly because it was households — the American taxpayer — who had to foot the bailout bill.

Now, thanks to massive $2 billion in losses racked up by JP Morgan’s London-based chief investment branch, another piece of financial sector jargon has taken center stage: regulatory arbitrage.

This sounds devilishly complicated, but stay with me. It’s really quite simple.