No, a New Glass-Steagall Is Not Good News For Citigroup, JPMorgan, Bank of America

For a while now KBW’s Frederick Cannon and Allyson Boyd have been urging big banks likeCitigroup (C), Bank of America (BAC) and JPMorgan Chase (JPM) to break up. A new Glass-Steagall, something backed by both Democrats and Republicans, would not be the ideal way to accomplish that, however. They explain why:

We along with others in the marketplace have shown that there is potential shareholder value creation from the breakup of some of the largest financial institutions, including Citigroup. Investors should not view the reinstatement of Glass-Steagall as a potential way to unleash value in large banks, however. A Congressional approach to breaking up the banks would not be based on economic value creation, but be based on the politics of applying penalties to the largest banks. Therefore it is difficult to develop a positive view on potential regulations for the shares of the largest banks, specifically JPMorgan Chase, Bank of America and Citigroup…

Read on.

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