We noted recently that the top banks faced a tricky decision regarding their holiday parties.

We suggested skipping them completely this year and are hardly surprised that the New York Times is now reporting that "the nation's largest banks have canceled firm-sponsored celebrations or moved them in-house to avoid the costs and the criticism."

Before the crisis, extravagance in the holiday season was no big deal.

"Big banks were renowned for their extravagant holiday parties. Goldman Sachs once rented out huge halls for its end-of-year galas, which featured appearances by performers such as Harry Connick Jr. and Bette Midler. In 2007, Morgan Stanley took over several floors of Lotus, then a popular Manhattan nightclub."

But that all ended with the crisis, and more banks have embraced the no-party line in an effort to avoid sending the wrong message in these tough economic times. Goldman Sachs and Morgan Stanley have not had a firm-wide party for four years now. At a lot of places, employees are paying for their own department-wide parties, which tend to have a cozier, more down-to-earth quality to them. For example, one Morgan Stanley group held a tacky sweater competition.

The one segment of the industry where parties are still lavish is the hedge fund industry. Bridgewater Associates apparently rented out the Webster Bank Arena, a 10,000-seat arena for its holiday party. All in all, companies might be wise to try to combine their festivities with charities, as Blackstone recently did. It held a coat drive as part of its party. I am surprised more banks haven't publicized their efforts in this area. They could use some good media.

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