A report about the global banking industry by Boston Consulting Group, which was released on Tuesday, says new regulations and less business will force the big banks to dramatically shrink. Of the 28 global banks the consulting firm looked at, only a few of the leading players like — Goldman Sachs (GS), Deutsche Bank (DB), and JPMorgan Chase (JPM) — will be able to remain at their current size, according to BCG.

The others, which include such banking behemoths as Bank of America (BAC), Barclays (BCS), Citigroup (C), Credit Suisse (CS), and Morgan Stanley (MS), will have to exit businesses, eliminate staffers, and rethink what they do in order to survive.

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Even so, BCG estimates the leading players still need to cut costs relative to income by 10% in order to hit profit targets. If profits don’t increase, and cuts are spread evenly, that alone could mean an additional 40,000 in layoffs from the largest banks. For all the banks, BCG sees little in the way of revenue growth in the next year or so.

And that’s under the current set of regulations. Last week, Senators Sherrod Brown and David Vitter proposed a new bill that would force a handful of large U.S. banks to roughly double the amount of capital they hold to cover bad loans and investments. There’s a debate as to how much this would reduce the profits of the large banks. Philippe Morel, who led the team that put together the BCG report, calls Brown-Vitter and similar proposed regulations in Europe “weapons of mass destruction.” Not even Goldman or JPMorgan would be able to survive at their current size.

There are some problems with the report. First of all, it’s unlikely regulators, already under attack for allowing banks to remain too big to fail, would welcome a system in which just three banks dominate the world’s financial markets. Second, the report looked at various Wall Street businesses based on their current profitability to determine whether banks would be able to stay in them under higher capital rules.

But those businesses may get much more profitable when the economy recovers, which will make them viable for more banks. And it’s not clear that higher capital requirements would force banks out of certain businesses. Anat Admati, a Stanford economics professor and author of The Banker’s New Clothes, says higher capital requirements will make banks safer, and as a result investors will still value those stocks even if profitability drops.

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What’s more, the report was focused on banks with investment banking and Wall Street-type businesses like underwriting and trading bonds, stocks, or structured financial instruments that allow others to bet on interest rates or commodity prices. That’s where the bulk of new-post financial crisis rules are hitting the banks, and where business has dried up the most. So Wells Fargo (WFC), which is the nation’s largest mortgage lender, fell out of the analysis. In fact, the report said that traditional lending could remain a large and profitable business for the largest banks.

But in the past decade or so there’s been a rush, originally led by Citi’s Sandy Weill, by the big banks to be able to do everything from provide checking accounts to derivatives. They said their Fortune 500 clients wanted it that way. And while some banks have retreated since the financial crisis, ironically with Citi having done it the most, they are still mostly pursuing the same do-it-all model. BCG’s consultants say the big banks have only really gotten serious about right-sizing their business in the past year or so, and most still have a lot more to do.

“The real structural cost-cutting hasn’t happened yet,” says Shubh Saumya, a partner in BCG’s capital markets practice. “It’s been on the margin.”

Update: An earlier version of this story stated that consultants at BCG thought certain large banks were likely to remain large, while other banks were likely to shrink. In fact, BCG was only offering examples of large banks that could be facing the choice of deciding whether or not to maintain their current size in the face of new regulations and lower demand for their capital market services.