More than three years after the financial crisis, the surprise disclosure quickly revived debate about whether banks can be trusted to handle risk on their own.
Sen. Carl Levin, D-Mich., chair of a subcommittee that investigated the crisis, said the loss was "just the latest evidence that what banks call `hedges' are often risky bets that so-called `too big to fail' banks have no business making."
The head of the Securities and Exchange Commission, Mary Schapiro, told reporters that the agency was focused on the JPMorgan loss but declined to comment further.
Some analysts were skeptical that the trading was designed to protect against JPMorgan's own losses, as CEO Jamie Dimon contended Thursday in a conference call with stock analysts and reporters.
The analysts said the bank appeared to have been betting for its own benefit, a practice known as "proprietary trading."
Dimon said the type of trading that led to the $2 billion loss would not be banned by the so-called Volcker rule, which is still being written and is expected to ban certain types of trading by banks with their own money.
The Federal Reserve said last month that it would begin enforcing that rule in July 2014. Bank executives, including Dimon, have argued for weaker rules and broader exemptions.
JPMorgan has been a strong critic of provisions that would have made this loss less likely, said Michael Greenberger, former enforcement director of the Commodity Futures Trading Commission, which regulates some derivatives.
"These instruments are not regularly and efficiently priced, and a company can wake up one day, as AIG did in 2008, and find out they're in a terrific hole. It can just blow up overnight," said Greenberger, a professor at the University of Maryland.
On Friday, bank stocks were hammered in Britain and the United States, partly because of fear that the JPMorgan loss would lead to tougher regulation of financial institutions.
JPMorgan stock was down 8.2 percent in early trading on Wall Street. It was down more than $3, and by itself shaved 25 points off the Dow Jones industrial average, which was up about 30 points on the day.
In Britain, shares of Barclays and Royal Bank of Scotland were down more than 2 percent.
JPMorgan stock was the hardest hit, but its American counterparts suffered, too: Morgan Stanley was down 4 percent, and Goldman Sachs and Citigroup each lost more than 3 percent.
Stock analysts said that bank stocks were hurt mostly because of regulatory fear, not because there was reason to believe other banks would discover similar losses.
"The regulatory and political environment is already a headwind, and clearly this doesn't help," Deutsche Bank said in a note to clients.
The trading loss was an embarrassment for JPMorgan, which came through the 2008 financial crisis in much better health than its peers. It kept clear of risky investments that hurt many other banks.
The loss came over the past six weeks in a portfolio of the complex financial instruments known as derivatives, and in a division JPMorgan says was supposed to control its exposure to risk in the financial markets.
"The portfolio has proved to be riskier, more volatile and less effective as an economic hedge than we thought," Dimon told reporters on Thursday. "There were many errors, sloppiness and bad judgment."
Bloomberg News reported in April that a single JPMorgan trader in London, known in the bond market as "the London whale," was making such large trades that he was moving prices in the $10 trillion market.
Dimon said the losses were "somewhat related" to that story, but seemed to suggest that the problem was broader. Dimon also said the company had "acted too defensively," and should have looked into the division more closely.
The Wall Street Journal reported last month that JPMorgan had invested heavily in an index of credit-default swaps, insurance-like products that protect against default by bond issuers.
Hedge funds were betting that the index would lose value, forcing JPMorgan to sell investments at a loss. The losses came in part because financial markets have been far more volatile since the end of March.
Partly because of the $2 billion trading loss, JPMorgan said it expects a loss of $800 million this quarter for a segment of its business known as corporate and private equity. It had planned on a profit for the segment of $200 million.
The loss is expected to hurt JPMorgan's overall earnings for the second quarter, which ends June 30.
"We will admit it, we will learn from it, we will fix it, and we will move on," he said. Dimon spoke in a hastily scheduled conference call with stock analysts. Reporters were allowed to listen.
JPMorgan is trying to unload the portfolio in question in a "responsible" manner, Dimon said, to minimize the cost to its shareholders. Analysts said more losses were possible depending on market conditions.