Regulators need to write new financial services rules and banks need to get back to banking, CLSA analyst Mike Mayo told CNBC's "Squawk on the Street" on Thursday.
"It's been two years since Dodd-Frank was passed," Mayo said. "If you're the regulators, get these laws written, if you're the banks, at some point you have to play the ball where it lies. You need to get back to the business of banking."
Mayo said there should be "no more excuses."
The analyst worries that the U.S. remains in a situation like Japan, with ongoing deleveraging and slow growth, but what's worse than Japan is the degree of regulatory uncertainty.
As an example, he pointed to the Volcker Rule, which limits the certain types of trading for banks' own account. "The Volcker Rule was implemented to make banks safer and (ratings agency) Standard & Poor's indicated it may downgrade banks because of the Volcker Rule," Mayo said.
He doesn't believe, however, that the election has added any more political risk to the banking sector. "The die has been cast," Mayo said. "It's just a matter of interpreting the rules that are out there."
Mayo is starting to get more bullish on some names in the sector, but not because of any change in the macro or political environment.
Mayo pointed to what Swiss bank UBS is doing at its investment bank. "UBS is undertaking the biggest restructuring in the history of banking," he said, "And it shows the potential for banks such as Morgan Stanley and Citigroup to better optimize."
If the banks don't start doing it themselves, Mayo expects to see shareholders ratchet up the pressure.
—By CNBC.com's Justin Menza
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