By ALAN ZIBEL And JESSICA HOLZER

WASHINGTON—U.S. bank regulators zeroed in on a lack of risk disclosure at J.P. Morgan Chase & Co. as hampering efforts to prevent the recent multibillion-dollar trading losses.
Comptroller of the Currency Thomas Curry on Tuesday told a House of Representatives hearing that the regulator is probing the level of reporting provided by J.P. Morgan's Chief Investment Office, the unit responsible for the bank's trading losses disclosed last month.
"In hindsight, if the reporting were more robust or granular, we believe we may have had an inkling of the size, the potential complexity, the risk of the position," Mr. Curry said. "What we're looking at on a prospective basis is to make sure there's a robustness to the reporting" and risk management, he said.
Mr. Curry acknowledged that the OCC only became concerned about J.P. Morgan's trading activities after press reports on the trades were published in early April.
The Federal Reserve's general counsel, Scott Alvarez, said that J.P. Morgan's managers "didn't have a good handle on the information and the understanding of the risk. Mr. Alvarez added that "we have to rely on the information that we get from the management of the organization."
J.P. Morgan Chief Executive James Dimon is scheduled to testify later in the day. Meanwhile, lawmakers quizzed Mr. Curry and other top regulators, about what they knew about the bank's derivatives-trading activities.
The comptroller's office has said it learned of "risk factors" from J.P. Morgan's derivatives traders in early April. The Wall Street Journal reported April 5 that a trader at J.P. Morgan, known as the "London Whale," made large bets on credit derivatives.
The hearing of the House Financial Services Committee was already proving more contentious than a Senate panel last week, where Mr. Dimon faced few tough questions and got a fair amount of praise.
Rep. Spencer Bachus (R., Ala.) the panel's chairman, said the J.P. Morgan trades highlight weaknesses in the current structure of financial regulation, which he called overly complicated. "Sitting before us today are five different regulators, all of whom have some supervisory responsibility over these trades and several of whom have examiners embedded at J.P. Morgan, but none of whom, apparently, was either aware of the bank's hedging strategy or raised concerns about it," he said.
Mr. Bachus also highlighted the need for banks to have strong capital cushions to absorb losses. "The most important lesson is how central capital is to the safety and soundness of individual banks and our overall financial system."
Rep. Barney Frank (D., Mass.), the panel's top Democrat, said the losses underscore the need for tough regulation of derivatives and criticized efforts by Republicans to roll back the Dodd-Frank financial overhaul law that bears his name. J.P. Morgan was able to withstand the losses, he said, but noted that many institutions aren't as strong.
"Not every institution has a fortress balance sheet," Mr. Frank said, echoing Mr. Dimon's often-stated description of his bank's finances. "Some institutions may have a picket fence balance sheet or a chain-link fence balance sheet."
Beyond J.P. Morgan, Republican and Democratic lawmakers traded barbs about how each side responded to the financial crisis, years before the bank's losses.
Rep. Scott Garrett (R., N. J.), scolded Democrats for having "no shortage of outrage" about the "London Whale" losses, but few complaints about the taxpayer rescue of mortgage giants Fannie Mae and Freddie Mac, or over loan guarantees given to bankrupt solar panel manufacturer Solyndra LLC. Rep. Mike Capuano (D., Mass.) shot back, "You must have missed the hearings that made me a movie star, Mr. Garrett."
Democrats blasted Republicans for trying to roll back Dodd-Frank, passed in 2010 in the aftermath of the financial crisis, while Republican lawmakers said they would direct their criticism at the banking regulators.
Gary Gensler, chairman of the Commodity Futures Trading Commission said the J.P. Morgan losses highlight the need for the commodities regulator to have authority over U.S. institutions' overseas derivatives activities. "Failing to do so would mean American jobs and markets would likely move offshore, but, particularly in times of crisis, risk would come crashing back to our economy," Mr. Gensler said.
Write to Alan Zibel at [email protected] and Jessica Holzer at [email protected]