JPMorgan Chase’s shares were pummeled and politicians blasted its CEO Jamie Dimon after the bank reported a shock $2 billion derivatives loss that even the pugnacious chief executive called “egregious.”

The huge New York-based bank sent shivers through the markets with the loss, after having convinced many that a well-managed bank could manage the risks of complex derivatives that lay behind the 2008 financial crisis.

Politicians called for tightening bank regulation and tough controls on hedging activities, and a Republican senator requested a hearing into the case.

Dimon revealed the losses late Thursday in an unscheduled call to analysts, saying they were incurred in the last six weeks by the New York bank’s risk management unit, the Chief Investment Office.

They involved trading in credit default swaps usually meant to offset other risks in the bank’s investments, but Dimon said the strategy “morphed” into trading that was overly complex, poorly executed and badly overseen.

Although he said the bank was still very profitable, Dimon also acknowledged the positions could possibly lead to another $1 billion in trading losses by the end of this quarter.

Investors made their displeasure brazenly apparent, savaging the bank’s shares from the start of Friday’s trading.

The firm’s stock closed down 9.3 percent at $36.96, wiping around $14 billion off the market value of the country’s largest bank.

There was little new information about what happened at the bank. Attention focused on the role of a London-based JPMorgan trader, French-born Bruno Michel Iksil, nicknamed “The London Whale” and “Voldemort,” after the villain in the Harry Potter books.

A source close to the matter told AFP that the loss was “related, but not exclusively” attributable to Iksil’s activities, which had been reported out of London in April by The Wall Street Journal.

But others said such a large loss could not have occurred without the knowledge of Iksil’s superiors.

Erik Oja, a banking analyst at Standard & Poor’s, condemned the “major embarrassment for the bank” after it survived the 2008 financial crisis relatively unscathed.

JPMorgan was also hit with a downgrade by the rating agency Fitch, and S&P cut its outlook to “negative.” US media said the Securities and Exchange Commission was investigating what happened at the bank.

But quickly, the focus turned to whether regulators need to tighten controls on banks’ complex risk-hedging activities and actively trading their own funds.

Dimon has led US banks in fighting the application of the new Volcker Rule, which would ban such proprietary trade. Banks also do not want to see curbs on their hedging activities.

JPMorgan’s 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,” said Senator Carl Levin, a Democrat.

Rick Gorka, spokesman for presumptive Republican presidential nominee Mitt Romney, said the loss “demonstrates the importance of oversight and transparency in the derivatives market.”

If elected Romney “will push for common-sense regulation that gives regulators tools to do their jobs, and that gives investors more clarity,” Gorka added.

Others questioned whether the largest banks could be adequately supervised at all.