There still may be more pain ahead for Bank of America, too. The Federal Housing Finance Administration, one of several agencies involved in the latest talks, wants to use the $4 billion it's getting from Morgan to extract another $6 billion from Bank of America.

The crimes of the last decade were truly massive, and although we might want to send them down the memory hole, they don't wash off that easily. In addition to the mortgage and trading scandals, the LIBOR scandal has barely been approached.

Last month, after Morgan offered $3 billion on the mortgage issue, analyst Dick Bove said the government is involved in "extortion". I think that's a common view among stockholders.

Another view is that the government, by hammering the largest banks for past crimes of subsidiaries, many acquired under duress, is making our banks less competitive against overseas rivals.

Morgan and Bank of America are now barely in the global top 10, which is headed by Germany's Deutsche Bank ( DB). The question to these critics isn't whether our banks are too big to fail, but whether our largest banks are too small to succeed.

What we may be seeing, instead, is a changing of the guard at the top of U.S. banking, engineered by law enforcement. My favorite banking ratio, the price-to-book ratio, holds the key here. As I've written before, most of the biggest banks are selling for less than their book value.

Wells Fargo ( WFC) is an exception.

Wells Fargo settled its mortgage discrimination charges more than a year ago for $175 million. It's selling at almost 1.5 times its book value, and it may be a bargain at that price. Wells Fargo has bought a host of brokerage companies over the years, with the ambition of making Wells Fargo Securities a top-five investment bank.

Wells Fargo is now the fourth-largest bank in the U.S., by assets, and is just two-thirds the size of its New York rivals with $1.44 billion in assets, but it could be moving up the standings.

At the time of publication, Blankenhorn held shares of BAC.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Dana Blankenhorn has been a business journalist since 1978, and a tech reporter since 1982. His specialty has been getting to the future ahead of the crowd, then leaving before success arrived. That meant covering the Internet in 1985, e-commerce in 1994, the Internet of Things in 2005, open source in 2005 and, since 2010, renewable energy. He has written for every medium from newspapers and magazines to Web sites, from books to blogs. He still seeks tomorrow from his Craftsman home in Atlanta.

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