JPMorgan, in an unexpected announcement, said it saw $2 billion in trading losses in the last six weeks, and may yet see more.
"We have egg on our face," Jamie Dimon, the massive bank's CEO, told a conference call. "We deserve any criticism we get."
JPMorgan's stock was trading about 6 percent lower in after-hours trading and could well drag down markets on Friday.
In recent weeks, the financial papers, particularly the Wall Street Journal, have been reporting on how the "London whale," a trader or traders at JPMorgan's London operations, has been distorting credit markets with big bets.
Now, apparently, those big bets mean a big hole for JPMorgan.
It is "striking how management and company downplayed the actions of this unit," before coming clean with the losses today, said Todd Hagerman, a senior banking analyst with Sterne Agee.
JPMorgan, one of the largest banks in the world, has $1.4 trillion in assets under management. That figure is equivalent to the gross domestic product of Spain, a country whose financial predicament is worrying global markets right now - though nobody is saying JPMorgan is in danger of going under because of the newly announced loss.