IF CURRENT BUSINESS WISdom is "get big or get out," banks pondering the Dean Witter-Morgan Stanley merger might entertain joining them. The combination creates the nation's biggest full-service brokerage, perfectly capable of giving banks new headaches.

Combining "Main Line" Morgan and Main Street Dean Witter establishes a company with plenty of deals-and product-on one end, and distribution clout on the other. And the Discover card's income stream can only reinforce the company during whatever bear market may come.

For big banks with section 20 subs, the real challenge could be that Morgan will be able to offer its customers enhanced markets for their issues, cutting into banks' market share.

And on the retail side, banks may worry about how the glitter of the Morgan Stanley name eases sales for the Dean Witter staff, who customers could perceive to be more knowledgeable.

As it's unseemly for capitalists to complain about capitalism, there's no reason why banks can't replicate the KeyCorp-First Union-Charles Schwab virtual institution. "Since customers are unbundling their purchase decisions, the onus on any provider is to offer superior products, and the only way to offer superior products is to go outside what you manufacture," says Navtej Nandra, a partner in Booz, Allen & Hamilton's New York financial group." FB

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