Spurred in part by public statements from vice chairman Michael E. O'Neill that BankAmerica Corp. is hunting for money management and brokerage firms to annex, post-Dean Witter, Discover & Co./Morgan Stanley merger speculation about who is talking cross-pollenization to whom is all the buzz. Will banks recreate themselves by acquiring nonbanks and lead the way to what one industry specialist calls multilingual financial services? Discussions with some of the usual suspects indicate that mergers will continue, but at what level and to what end are up for grabs. Contemplating the effect of such new configurations on the competitive environment in the next three to five years, three camps emerge: gung-ho futurists; wary hopefuls, and the noncommittal/unconvinced.

The rosy-eyed experts eagerly await inter-disciplinary combinations. The time is right. Banks can afford to buy, thanks to record capitalization levels, which are said to total $300 billion for the top 10 institutions. By broadening product capacity and/or customer base, banks will build scale, beef up technology to offer alternative delivery options and one- stop shopping "from cradle to grave," and thus recapture eroding consumer market share. In addition, banks buying outside the fold can establish a presence in a state without the onus of its charter and ensuing CRA requirements.

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