J.P. Morgan Chase, the largest bank in the United States, lost a whopping $2 billion on risky investments, company officials revealed Friday.
The Wall Street giant said a complex trading strategy gone bad wiped out the money. CEO Jamie Dimon admitted the company is responsible for "many errors, sloppiness, and bad judgment."
"The new strategy was flawed, complex, poorly reviewed, poorly executed, and poorly monitored," Dimon said in a conference call with investors.
The losses happened over the last six weeks after the mega-bank made some huge bets on derivatives.
Analysts say J.P. Morgan Chase is big enough to absorb the loss but the company's stock did take a big hit. Still, the broader market seemed to shrug off the news in early trading.
Dimon said the road ahead, however, may be rough.
"Therefore, the volatility for the rest of this quarter and next quarter so, will be high. It could cost us as much as a billion dollars or more," he explained.
Derivative trades like these are partly responsible for the economic meltdown of 2008 and are refueling the debate over regulating risky trades.
"J.P. Morgan and Jamie Dimon on the conference call was certainly angry, certainly annoyed, and apologetic -- but not a changed man," Matt Nesto, with Yahoo! Finance Breakout said.
Dimon has been especially outspoken and has fought back hard against new bank regulations.
Meanwhile, Sen. Carl Levin, D-Mich., is pushing for new banking rules. The Democratic lawmaker said J.P. Morgan's loss is a harsh reminder that regulators need to establish tough, effective standards.