There's something odd about the outrage over too-big-to-fail banks.

The standard argument is that the banks got bailed out, which takes away the pain they should have faced for their reckless behavior.

And that's true. But only to a point. Shareholders of many of the largest banks lost nearly everything. Bank of America (NYSE:BAC) and Citigroup (NYSE:C) shareholders lost more than 90% of their wealth after the crash. AIG (NYSE:AIG) stock now trades 97% below where it was a decade ago.

In an interview I conducted last week, Nobel prize-winning economist Joseph Stiglitz explained where the real outrage should reside with too-big-to-fail banks. Have a look (transcript follows):

Joseph Stiglitz: "The shareholders bore a price. The managers bore much less of a price. And in capitalism, the nature of being a shareholder is you're supposed to exercise discipline over your managers to make sure they're doing the right thing, and they hadn't done that. I think what aggrieved a lot of people was that the shareholders still did get saved and the bond holders, who are also supposed to be bearing the risk, got saved, and the bankers got saved.

So yes, we had to save the financial institutions, but we didn't have to save the bankers, the bondholders and the shareholders. We could have maintained a flow of credit much more effectively without the abusive credit card practice, without the predatory lending had we taken a more active role in restructuring these financial institutions."

Fool contributor Morgan Housel has no position in any stocks mentioned. The Motley Fool recommends American International Group. The Motley Fool owns shares of American International Group, Bank of America, and Citigroup and has the following options: Long Jan 2014 $25 Calls on American International Group. Try any of our Foolish newsletter services free for 30 days.

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