Pay all wages over $30,000/year in toxic assets. Both BAC and C have already designated toxic assets that are backstopped by the Treasury. Simply let the TARP auditors select from those assets, AT CURRENT BOOK VALUE, put them in a pool, and let the employees figure out how to liquidate them to get as much salary as possible out of them.
Since Andrew Cuomo is making noise about clawing back the MER bonuses, just do a deal and give them $4 billion in CDO's.
This would spur some real innovation. The could take their pick and either try to create more elaborate structured securities to sell to someone, or deconstruct them into whole loans and try to sell them, refinance them, do workouts, foreclose and rent. Whatever.
Do something. Or anything to align the interests of the public and the employees.
I would bet they would find a way to extract more then book value out of them.