Like Captain Ahab in "Moby Dick", the Federal Reserve and the Financial Services Authority ("FSA") are not waiting around for JPMorgan Chase to provide an explanation for the $2bn loss incurred by the JPMorgan Group, the bank's so-called chief investment unit.  They pursue the problem and formulate their own conclusions. The U.S. and British regulators been been in discussions with JPMorgan Chase for nearly a month about the activities of the trading group.  Both were first informed about the trading activities when media reports surfaced in April about a London-based trader with outsize positions, who was called the "London Whale" and "Voldemort." The recent conversations between the bank and United States and British authorities do not represent a formal inquiry into the trading activity, according to two people, who spoke on the condition of anonymity because they were not authorized to speak publicly.  Since then, regulators have asked for more information about the JPMorgan group, the chief investment office.  As the losses started to surface, the bank again reached out to regulators in the week prior to the bank’s official announcement, one of the people said.  "It’s not surprising that we’ve been holding discussions about what has been going on," said one person, who spoke on condition of anonymity. Regulators’ efforts to get to the bottom of JPMorgan’s recent trading activity come as authorities worldwide are clamping down on the risks that financial institutions are able to take.  Along with the Volcker Rule, which will restrict banks from trading with their own money, officials are demanding that firms hold more reserve capital to offset any future financial shocks and are forcing so-called over-the-counter trading activity, which allows companies to trade between each other, onto exchanges to increase the transparency of financial markets. "The enormous loss JPMorgan announced today is 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," Senator Carl Levin, a Michigan Democrat, said in a statement on Thursday. Bank Proprietary Trading Unit. The investment office is run by Ina Drew in New York, with Achilles Macris, the former head of global capital markets at Dresdner Kleinwort Wasserstein, running the unit’s London operations. On a conference call on Thursday, Jamie Dimon, the bank’s chief executive, blamed "errors, sloppiness and bad judgment" for the $2 billion loss, which stemmed from a hedging strategy that backfired. The mistakes "were self-inflicted and this is not how we want to run a business," he added. For further details, go to:  [Dealbook, 5/11/12].