Meredith Whitney, the star banking analyst is very bearish on the banks. She told CNBC:
"Politicians have proven far worse than our worst expectations.It could be very bad for banks."
"Some of these regulatory proposals are going to make it so difficult for everyone involved that you'll see, I think, at least another 1.3 trillion dollars of credit sucked out of the system. It's going to make accessing capital so difficult for pockets of the country, particularly for small businesses that often depend on credit cards for funding."
Investors should avoid financials at all costs, because the Senate's financial reform bill will end up restricting credit and hurt bank earnings, Meredith Whitney told CNBC. Whitney added European banks are in even worse shape than their US counterparts
Related: Goldman Sachs Group, Inc. (Public, NYSE:GS), Bank of America Corporation (Public, NYSE:BAC), JPMorgan Chase & Co. (Public, NYSE:JPM), Citigroup Inc. (Public, NYSE:C), Visa Inc. (Public, NYSE:V), MasterCard Incorporated (Public, NYSE:MA), American Express Company (Public, NYSE:AXP)