When U.S. President Barack Obama made clear last week that he favors a return of the Glass-Steagall Act, big banks virtually saw the sword of Damocles hanging over their lifeline.

But yet, it is still too early to say if this is the knock-out that would end Wall Street's risky game, or it may just be another knock missing the target.

There is a good reason to worry about the earnings prospects of Wall Street giants. Take a closer look at the latest financial reports from Wall Street's most influential banks that all had published their results for the final three months of last year by the time Obama delivered his verdict: investment banking business has been the main profit generator while credit loan losses are still bleeding on banks' balance sheets.

For example, robust growth in debt and stock underwriting fees helped JPMorgan Chase & Co. earn 1.9 billion U.S. dollars, which was more than half of its quarterly profit, while the bank's provision for credit loan losses topped 7.28 billion U.S. dollars.

Similarly, Wells Fargo presented record quarterly revenue and annual profits but saw its net charge-offs soaring to 5.4 billion dollars in the fourth quarter.

"Almost all of the increase in charge-offs was in commercial and consumer real estate, with the other portfolios showing flat to declining losses," the bank said.

The banking industry shares the same story. So it is not surprising that Obama's proposal was confronted with a plunging equity market, uncertain investors, and angry bank executives.

Under the new rules, the size and operation of big financial firms will be tightly limited, and banks will be prohibited from investing in their own hedge funds and private equity, as well as proprietary trading. In other words, Goldman Sachs, JPMorgan, Bank of America and alike would see their business models in jeopardy.

But will Wall Street bow to Washington this time? Hardly.

First of all, reinstating the Glass-Steagall Act, which separates investment banking from commercial banking business, is no easy thing. It took the financial industry more than six decades to lobby the government for eventual repeal of the act in 1999. Why won't banks' highly-paid lobbyists in Washington act again?

And bear in mind Goldman Sachs, the undisputed leading investment bank which is so closely intertwined with the White House that got itself the nickname "Government Sachs." The bank will not sit and see its fat business getting ripped off.

People may also wonder how the Obama administration is going to implement the proposal. One simple question: How will it first of all define proprietary trading?

It is no longer the time of the Great Depression. In a world where modern finance has become so complex and globalized, setting barriers between commercial banking and investment banking is close to "mission impossible."

Finally, the Obama administration doesn't seem to have a good track record of being tough enough on Wall Street. Take for example, Citigroup and Bank of America have already started to repay the loan, and once they finish doing that they may no longer "qualify" for the limit.

Yes, there have been harsh words and tight rules. But how will these count as they were made under pressure from an angry public and political struggle? And Wall Street seems always able to get around. Top lawyers have already been hired to examine the legitimacy of a levy on financial firms. Who knows banks won't strike back this time?