The Federal Reserve Board will have to move gingerly as it takes up the proposed merger of Citicorp and Travelers Group.

The central bank is eager to oversee the world's largest financial company, and it clearly has the authority to approve the deal. But approval would put the Fed in the position of winking at the new company's brash bet that Glass-Steagall Act prohibitions will crumble. And that could raise the wrath of Congress.

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