Are Banks a Buy?

Last week the Basel committee met to try and find new regulations to address the ‘too big to fail’ problem as well as other issues they feel will impact the future stability of the global banking system.  This leads to the question of whether the banking sector is a buy during this weakness.  While it does seem tempting to look at some of these banks as a valuation play, the future revenues of these companies, as well as their dividends, are in jeopardy.  Being selective on which banks to purchase would be a wise decision from here.  Banks, such as regional and Japanese banks could see a benefit from these rules, while larger US institutions will no doubt see margins contract.