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

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