Financial regulators and JPMorgan Chase (JPM) CEO Jamie Dimon testified in front of a Congressional House Committee Tuesday to discuss how a $2 billion-plus trading loss at JPMorgan managed to escape the gaze of Dimon and federal regulators.

While the hearing was about the bank's massive loss, it naturally strayed into several subjects with suggestions from participants that Basel requirements, the Volcker Rule and the Dodd-Frank Act could have either prevented the loss or may have contributed to it with JPMorgan looking for ways to meet new capital requirements in light of today's Basel III rules.

In previous testimony, Dimon told the U.S. Senate that a complex and hard-to-manage investment strategy taken in response to Basel requirements led to the embarrassing trading loss.

"In December 2011, as part of a firm-wide effort in anticipation of new Basel capital requirements, we instructed the chief investment office to reduce risk-weighted assets and associated risk," Dimon said. "To achieve this in the synthetic credit portfolio, the CIO could have simply reduced its existing positions; instead, starting in mid-January, it embarked on a complex strategy that entailed adding positions that it believed would offset the existing ones."

U.S. Rep. Jeb Hensarling, R-TX, raised questions about whether Dodd-Frank, which was designed to buffer taxpayers from bailing out large banks, had failed to truly cut down on the size of the big banks. "Here we are two years after the passage of Dodd-Frank, and we see these larger banks enjoying a funding advantage over smaller competitors," Hensarling told a panel of regulators. "If the legislation had ended too-big-to-fail wouldn't we have expected to see this funding level go down?"

Dimon said that JP Morgan was not a too-big-to-fail institution.

Scott Alvarez, general counsel for the Federal Reserve Board of Governors, responded to Hensarling's questioning saying the big banks sizes are largely the result of merger and acquisitions taken after the financial crisis to save banking institutions, leading to larger firms today.

Regulators on the panel suggested the Volcker Rule in full effect would have increased transparency potentially lessoning the risk that JPMorgan eventually faced. However, Securities and Exchange Commission chair Mary Schapiro said the SEC is still looking at the extra-territorial reach of Dodd-Frank when it comes to trades in areas outside the United States, including the London trading office, where the infamous trade occurred.

While Shapiro said it's too soon to draw any definitive conclusions, she added, "We are investigating to see whether the disclosure of JPMorgan's risk was adequate to fall within Dodd-Frank rules."

Lawmakers asked Dimon about a value-risk model that JPMorgan changed in January without disclosing.

Dimon responded, "We have hundreds of risk models. We are frequently changing them and making them better. They were trying to improve and update the model." He admitted the model was changed back after they realized it was not the best tool to use.

During the exchange with lawmakers, Dimon subtly suggested that a focus on the $2 billion trade loss is a distraction from larger issues impacting the global economy.

"I am far more worried about Europe than I am about this trading situation," Dimon said.