Banks are between a rock and a hard place.

For big banks that want to remain major players, this move is going to force them to make strategic mergers, just like 1998.

The earnings results clearly show that margin pressure remains intense, especially on banks that don't have large capital markets businesses.

The challenge for banks in the slower revenue growth environment is to become more efficient to drive down operating expenses. With the spread between the long end and short end being narrow, it's tougher for banks to make money.