Fitch lowered JPMorgan's short-term and long-term debt -- reducing the long-term grade to A+ from AA-, CNN Money reported. Fitch placed the bank on ratings watch negative.
In a statement announcing the downgrade, Fitch said it considered the $2 billion loss as "manageable" but said "the magnitude of the loss and ongoing nature of these positions implies a lack of liquidity."
"It also raises questions regarding JPM's risk appetite, risk management framework, practices and oversight," Fitch said.
Shares of JPMorgan fell 9 percent in New York Friday, and the falloff persisted after hours, CNN said.
U.S. and British regulators said they have been discussing the losses at JPMorgan Chase for almost a month.
The New York Times reported Friday that inquiries, although none of them are formal yet, have centered on a derivatives trader based in London, who has been tagged with the nicknames "The London Whale" and "Voldemort." The trader, Bruno Michel Iksil, had built up derivative positions valued at $100 billion, The Wall Street Journal reported.
The bank said Thursday it had lost $2 billion in trades at its Chief Investment Office, a risk assessment branch where Iksil works.
Iksil did not return calls requesting a comment. He still works at the bank, the Journal said.
Chief Executive Officer James Dimon said Thursday the losses were "self-inflicted and this is not how we want to run a business."
By Friday pundits and politicians were calling the losses validation of the so-called Volcker Rule, named after former U.S. Federal Reserve Chairman Paul Volcker. The rule is meant to limit or ban proprietary lending by commercial banks -- and prohibit them from owning hedge funds, which are storefronts for investment risks.
That rule, part of the Dodd-Frank financial overhaul bill, is set to go into effect July 21 but regulators are still working on details that could delay its implementation, the Journal reported.