Not too long ago, it was fashionable to say the worst of the financial crisis had passed. Now it's becoming evident that such pronouncements are premature. Bloomberg reckons that after reporting record revenue in 2009, the top six banks' combined revenue fell by an average of 8 percent in the third quarter year-over-year and 16.3 percent over the last two quarters; revenue so far this year is down by 4.1 percent.

This suggests the industry is heading into "what could be its slowest period of growth since the Great Depression," notes Bloomberg. To be sure, this is to be expected. The boom years, one could argue, featured a surge in revenue that was generated essentially by leverage. But that is now being taken out of the system, and the logical consequence is the bubble will continue to deflate. Banks are suffering losses elsewhere as well, notably on their card operations.

The question for the big banks is whether they will cling to old notions or forge new ground. You can either complain or come up with a new business model that can offset the losses driven by the financial bubble that popped in 2007.

What we have yet to see is a definitive business model change by banks, though some are streaming overseas or building up their retail asset management and the like. It will be interesting to see which bank can come up with something groundbreaking that leads the way for the next growth spurt, the way the dot.com and MBS booms did.

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