Still Waiting for Post Crisis Banking: Street Whispers

NEW YORK ( TheStreet) -- More than two years after the passage of Dodd-Frank and more than four after the collapse of Lehman Brothers, fundamental questions remain about what the largest U.S. financial institutions will look like in the post crisis era.

The latest evidence of the uncertainty comes from Morgan Stanley ( MS), which has been shopping its once-revered commodities trading business for several months, according to several news reports and a former manager in the unit. While CNBC reported in July that a 15% stake sale was being discussed with the Qatar Investment Authority, reports last week in the Financial Times and Reuters indicated a larger stake sale--or maybe even a sale of the entire unit-- was being discussed, though Reuters added that the talks had run into difficulties.

A key issue, according to the Reuters report, is whether the Federal Reserve will allow banks to keep physical commodities and acquire new ones to complement their trading businesses. Goldman Sachs ( GS) and JPMorgan Chase ( JPM) also possess large holdings of physical as well as financial commodities assets.

A report from Bernstein Research analyst Brad Hintz on Friday argued that if Morgan Stanley were to exit the business, it could create an opportunity for Goldman.

"Goldman Sachs has said on numerous occasions that its trading operations should benefit as others pull back from portions of the market, pricing adjusts and market shares shift - this may be the first such retreat," Hintz wrote.

But commodities trading isn't the only instance where new rules are forcing some players out of businesses they had dominated while leaving others behind to gain still larger share. A similar phenomenon is occurring with mortgage servicing, where Bank of America ( BAC) Citigroup ( C) and JPMorgan are retreating from the business due to stricter capital rules that make it less profitable, while Wells Fargo ( WFC) has decided it will capitalize on the opportunity to gain share despite the higher costs of staying in the business.

Pay is another area where clearly much has still to be determined. Though companies and analysts have been saying for some time that compensation has to move lower, Morgan Stanley remains under pressure from shareholders to do more, according to Reuters, and CEO James Gorman told the Financial Times Friday he plans to be more aggressive in slashing compensation.

But this isn't the first time Gorman has made these types of comments , and investors apparently still aren't satisfied.

Has Wall Street really changed in the wake of the crisis? One senses the biggest changes are still to come.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.