Back in October, Bank of America’s chief executive was defiant. Thanks largely to the acquisition of Countrywide in 2008, his bank had become a lightning rod for lawsuits over mortgages and mortgage-backed securities. He told analysts back then, “The right answer is to fight.”

But Moynihan has reversed course, agreeing to pay $8.5 billion to settle a major case filed against Bank of America. The decision ends one the bank’s most high profile legal battles. Plaintiffs include the Federal Reserve Bank of New York, Pimco, and BlackRock. They bought $105 billion worth of mortgage-backed securities that lost money after the housing collapse.

Bank of America [NYSE: BAC] shares rose on the news, despite the fact that, as the New York Times points out, the settlement could wipe out the bank’s earnings for the first half of the year. And litigation, along with costly settlements, will mean reduced earnings for several quarters to come.

But trying to win, (or as Moynihan put it, to fight) has been a costly choice, as mortgage-related litigation has weighed on bank shares over the past year. The faster that Bank of America, Citigroup [NYSE: C], JPMorgan [NYSE: JPM], and Wells Fargo [NYSE: WFC] can settle their lawsuits, the shorter the overhang and the fewer surprises for investors.

Analyst Chris Whalen is glad to see that Bank of America’s settlement takes the bulk of the Countrywide representative and warranty claims off the table, and that reserves are in place for other similar claims. But he remains cautious on the bank, noting that the settlement doesn’t cover other fraud claims or loans sold by other Bank of America entities to private-label trusts.

And Bank of America has filed a big lawsuit of its own. A New York appeals court yesterday revived the bank’s suit against the broken monoline insurer MBIA, which claims that MBIA acted fraudulently when it reorganized itself in the midst of the financial crisis. It’s a complicated case that could tie up resources and executive attention for years.

If Wall Street’s response to today’s settlement news is indicative of what it wants from Moynihan, we’ll see Bank of America settle its biggest legal claims as quickly as possible, take the financial hit, and move on. Then we can find out whether Moynihan can actually fix a bank that is among the nation’s most important Main Street lenders, but one of its most broken financial giants.