JPMorgan Chase saw around $11 billion wiped of its market value as investors punished the biggest US bank for massive trading losses.

JPMorgan, which had withstood the 2008 financial crisis, disclosed a $2 billion derivatives trading loss after the markets closed yesterday.

While analysts said that JPMorgan has the resources to absorb the losses - the Wall Street bank estimates it will take in $4 billion in profit for the current quarter - they point to its blow to confidence on Wall Street.

With President Barack Obama's administration pushing the so-called "Volcker Rule," which would forbid banks from much of the trading of their own portfolios, "the timing could not have been worse," said big US bank Citigroup.

JPMorgan's shock losses "will likely impact all capital market-sensitive stocks due to increased concerns of a more restrictive Volcker rule," Citigroup said, warning that "it would severely impact liquidity in the markets."

The JP Morgan chief executive Jamie Dimon - who was paid $23m last year - said last night in an unscheduled conference call that the strategy taken at its CIO had been "riskier, more volatile and less effective" than previously believed.

He said there had been errors, sloppiness and bad judgement, egregious mistakes.

JP Morgan had come through the financial crisis in better shape than many of its rivals after avoiding risky investments that had hurt others.