Big Bank Stocks Just Aren't Worth the Headache

NEW YORK (TheStreet) -- Regulators continue to tighten the screws on big banks like Bank of America (BAC) , JPMorgan Chase  (JPM) and Goldman Sachs  (GS) , and investors just aren't getting paid to take the risk.

The latest salvo came Tuesday from Federal Reserve Governor Daniel Tarullo, who told Congress he wants to increase capital requirements on "too big to fail" banks. Tarullo's comments prompted a shrug from Morgan Stanley analyst Betsy Graseck, who wrote in a research note that the regulator has been making statements like this for at least three years.

Michael Yoshikami, CEO of San Francisco-based Destination Wealth Management, is willing to hang onto his shares of Citigroup, however, on the view they will eventually outperform.

Stricter capital rules "suggest to us that margins are going to compress and banks will be less profitable," he said. Still, "large banks still have scale which I think will help them overcome these additional capital requirements and the scale will particularly pay off when, sometime in our lifetime, net interest margins actually improve," he said.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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