The third concern is a real one, Cohen says. That is the fear that massive financial institutions threaten to bring the economy down with them when they fail. However, Cohen believes Title II of the 2010 Dodd-Frank legislation will prove adequate to resolve big banks when they fail. And this approach avoids all the negative consequences of a forced breakup, he argues.

Other banking industry authorities, such as Davis Polk partner and former FDIC general counsel John Douglas, disagree with Cohen on the likely efficacy of Title II.

In a research report published Monday, financial services-focused investment bank Keefe Bruyette & Woods cited "historical analysis," in arguing "investors should be prepared for the possible eventual break-up of the largest financials, including Bank of America ( BAC), Citigroup ( C) and JPMorgan Chase ( JPM)."

The report points out that those three banks have been the largest in the U.S. since 1996, but at that time they all had less than $350 million in assets. In 2006 only one--Citigroup--had more than $1.5 trillion in assets. In 2011, however, all three had substantially more than that total, with JPMorgan and Bank of America topping the $2 trillion mark.

"The cycle of regulation and deregulation generally includes the break-up of conglomerates as the cycle turns toward greater regulation and reduced profitability. This has yet to occur in the United States during this cycle, but in our view, it is a definite future possibility.

Sanford Bernstein analyst Brad Hintz made similar points during a panel discussion last week, arguing the business models of large bank-owned securities dealers, including not just the big three, but also Goldman Sachs ( GS)and Morgan Stanley ( MS) may have to shift radically to adapt to the new environment.

-- Written by Dan Freed in New York. Follow me on Twitter
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

If you liked this article you might like

CEOs Focused on Tax Reform, Business Roundtable Survey Says

All Eyes on the Godfather of Central Banking as Fed Has Huge Meeting This Week

Chase Hires Amazon Customer-Service Exec as Digital's Rise Reshapes Branches

Here Are Monday's Hottest Stocks as the Dow Reaches New Records

Morgan Stanley Is Using Snapchat to Recruit College Students and Make Them Rich