First Union Corp. chairman Edward E. Crutchfield on Friday predicted the first $1 trillion-asset bank could be created in Europe within two years.

European goliaths could overpower U.S. banks if Congress tries to restrict consolidation here, he warned at a Federal Reserve Bank of Chicago banking conference. "We have to be allowed to keep going because (European banks) are going to give us very substantial competition," Mr. Crutchfield said.

The House Banking Committee recently invited 23 witnesses to a daylong hearing to weigh in on the recent merger wave.

Further consolidation of banks in the United States is inevitable, Mr. Crutchfield said, predicting there would be eight to 10 large banks and fewer than 3,000 community banks within several years.

Mr. Crutchfield dismissed as irrelevant the congressional debate over whether securities and insurance underwriting should occur in units of a bank or in its holding company. "I don't give a damn where they are set up," he said. "I'll let the lawyers figure it out."

What matters more is the ability of a single salesman to offer banking, securities, and insurance. "You've got to integrate the businesses in terms of the sales forces," he said.

Mr. Crutchfield said he was not interested in buying an insurance underwriter, complaining that that business is only marginally profitable. But "selling insurance is a very profitable business," he said, adding that First Union made $100 million in pretax earnings on insurance sales last year.

The convergence of the banking, securities, and insurance industries is the most significant change to the financial system in generations, the First Union chief said.

"This is a once-in-a-century change," he said. "It may even be the biggest change since Alexander Hamilton created the banking system here."

Echoing remarks he made earlier this month, Mr. Crutchfield predicted the first truly global banks would emerge within five years when U.S., European, and Japanese banks form alliances allowing them to serve foreign customers through their new partners.

"All three could shut down their overseas operations and save a hell of a lot of money and not see any loss of income," he said.

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