KBW's analysis, though, looks specifically at what the fallout will be beyond the bank itself and finds that government regulators and consumer watchdogs will be emboldened.
"The headlines from the WFC settlement regarding unauthorized customer accounts kill any possibility that Congress will make changes to the structure and authority of the Consumer Financial Protection Bureau," the report said.
Regulators aren't finished with Wells Fargo.
Federal prosecutors also reportedly are launching a separate probe into the bank's practices in the wake of the settlement with multiple agencies.
The next step after that could come from Congress, which collectively has been itching to break up the big Wall Street power institutions whose interconnected nature aggravated the financial crisis. Both Hillary Clinton and Donald Trump have indicated a desire to get tough on banks, thought Trump also has vowed to repeal the Dodd-Frank regulations.
"Lawmakers who want to break up the banks will argue that WFC proves that the largest banks are simply too big to manage and need to be split apart," KBW said. "Large banks will lose additional political capital in the wake of the WFC headlines and will find it tougher to find allies in Congress to defend the banks."
Other effects include the potential for regulators to require more stringent "living wills" for banks on how they would be unwound if found to be systemically dangerous, and pressure to change how bank compensation works.
Wells Fargo also has come under pressure for not trying to claw bank salaries from employees involved in the illegal practices.
KBW said the issues will pile up to affect both the bank and its fellow financial institutions.
"The headline and reputational risk for any bank in a position similar to WFC is significant, and the ultimate economic issue is whether a bank loses customers ... but there are industry-wide implications which will be felt into 2017 and beyond," the note said. "Even after the WFC headlines subside, the recent news will be a powerful talking point any time policymakers debate changes in regulatory policy."
KBW has an "outperform" rating on Wells Fargo, with a $57 price target, or 24-percent upside from the current level.
Wells Fargo officials do not generally comment on analyst reports and declined comment on the KBW analysis as well.