NEARLY seven years after the financial crisis, banks are still churning out profits and wrestling with regulators. Yet Wall Street, by many important measures, appears to be in the middle of a humbling transformation.
Bonuses are shrinking. Revenue growth has stalled. Entire business lines are being cut. And some investors are asking whether the biggest banks should be broken up - changes that are all largely attributed to a not-so-well-known set of rules regarding capital, a financial metric that captures how much cushion banks might have in the event of a crisis.
"We have substantially reduced the amount of risk they can take," said Timothy Geithner, the former Treasury secretary. "We've...