The S&P 500 has started off on shaky ground so far in 2016, but few stocks have been hit as hard as big bank stocks Bank of America (BAC), Citigroup (C) and Morgan Stanley (MS), all of which are already down more than 25% this year. These banks’ earnings are all at multi-year highs, and the Federal Reserve finally started raising interest rates in December, so there’s something more going on with these stocks than simple “market fundamentals.”

What’s the deal?

Breakup Fears Dragging Down MS, BAC, C Stock

As all Americans are constantly reminded, 2016 is an election year, which means plenty of political headlines and market uncertainty. Despite the fact that the financial crisis is now eight years behind us, there has been a renewed push of late to break up the banks that were once considered “Too Big To Fail”. We’re looking at you BAC, C, and MS.

New president of the Federal Reserve Bank of Minneapolis Nell Kashkari has spearheaded this public discussion, claiming that the 2010 Dodd-Frank legislation didn’t go far enough in protecting the U.S. economy from the big banks.

“Now is the time for Congress to consider going further than Dodd-Frank with bold, transformative solutions to solve this problem once and for all,” Kashkari recently said in a speech. Of course, with a growing income gap in the U.S., any politician knows that lashing out at giant corporations gets a big cheer at every rally. Both Democratic presidential front-runners Hillary Clinton and Bernie Sanders have expressed desires to break up the big banks, although Sanders has made the issue a centerpiece of his campaign.

Bank Reformation

Anyone holding BAC, MS, or Citigroup stock are all-too aware of how much safer the U.S. financial system is now than it was prior to the crisis. Dodd-Frank created the Financial Stability Oversight Council, the Orderly Liquidation Authority, the Consumer Financial Protection Bureau and the SEC Office of Credit Ratings. Perhaps most importantly, it implemented the Volcker Rule to severely limit the speculative trading activity at investment banks like Morgan Stanley.

In addition, big banks must undergo rigorous annual stress testing and maintain adequate capital levels to weather even severe stress test scenarios. Finally, the annual Comprehensive Capital Analysis and Review takes a detailed look at each bank’s capital return plans, and each plan must be approved by the Federal Reserve prior to implementation. That’s right, the 2.5% yield on MS stock is made possible to you by Janet Yellen.

In terms of downsizing and reducing risk, BAC says it has sold more than 70 individual businesses and loan portfolios in the years since the financial crisis. Citigroup has dumped more than a trillion dollars of non-core banking assets, including its life and casualty insurance businesses, an investment bank, an asset management company and its personal lending business.

Political Rhetoric Or Regulatory Reality?

Sometimes, the stock market is more than just numbers. BAC, MS, C stock — they all trade at historically-low single-digit forward P/E ratios and less than two-thirds their respective book values. The market clearly seems concerned about potential regulatory changes that the 2016 election could usher in. However, from a practical standpoint, although there is always a degree of systemic risk in any financial system, these banks are much safer than they were prior to the financial crisis.

In terms of potential bank breakups or utility-like conversions, the American people should be wise by now to the fact that campaign talking points are created to win elections and not necessarily intended to bring about real change. Just like President Bush’s pledge to “pay debt down to a historically low level,” President Obama’s promise to abolish income tax on seniors, or any number of other idealistic campaign promises over the years, the most likely outcome is the status quo. This outcome is especially likely when there’s so much money and power invested in keeping things the way they are.

As an investor, I don’t care so much about how things “should” be, but rather about how things likely will be. I believe that history indicates that it’s a lot more likely BAC, MS, and Citigroup stock have become oversold at current levels than it is that the next president will break up or nationalize the banks.

As of this writing, Wayne Duggan was long BAC.