Derivatives losses of at least $2 billion at JPMorgan Chase & Co. show the need for extending Dodd-Frank Act swap regulations to overseas trades, said Gary Gensler, chairman of the U.S. Commodity Futures Trading Commission.

“We've had another stark reminder of how trades overseas can quickly reverberate with losses coming back to the United States,” Gensler said today in a speech at a Financial Industry Regulatory Authority conference in Washington. “The bank here in the U.S. is absorbing these losses” on trades conducted at JPMorgan in London, he said.

JPMorgan, Goldman Sachs Group Inc. and other U.S. banks have said Dodd-Frank rules designed to bolster oversight of the derivatives market will hurt their ability to compete with foreign-based rivals if the rules are applied to overseas offices. The debate over the reach of Dodd-Frank overseas is among the most controversial elements of the 2010 financial overhaul.