As part of an overhaul of its bank supervision, the New York Fed replaced almost all of its examiners at JPMorgan Chase in mid-2011, a move that meant the Fed staffers on hand at the bank lacked a deep understanding of its operations, according to the New York Times. The Fed has roughly 40 examiners at JPMorgan, and the turnover occurred as the chief investment office of the bank's treasury office was taking riskier bets that led to the large trading loss JP Morgan reported in May. According to the story, the turnover took place over several months. When JP Morgan reports its earnings tomorrow, it is expected to cite losses of about $5 billion related to the trading losses.

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