Ask John F. Grundhofer what keeps him awake at night, and he doesn't hesitate before answering.

"The pace of development of the Internet and how it can be used in a profitable way is one of the most dynamic issues I've faced in 40 years in banking," the president and chief executive officer of U.S. Bancorp said in an interview during the International Monetary Conference here.

The banking company will soon offer Internet trading services to its high-net-worth and brokerage clients, Mr. Grundhofer said.

Private banking and trust clients will be able to trade on-line through the company's discount brokerage starting in July.

The service will be extended in the fourth quarter to clients of the Minneapolis company's full-service brokerage arm, U.S. Bancorp Piper Jaffray.

Mr. Grundhofer said the Internet trading initiative has been in the works for some time.

But the plan has a new urgency as a result of Merrill Lynch & Co.'s recent announcement that it will introduce on-line trading in December.

"Merrill and others have set the stage," he said. "When the leader steps out and says things are going to have to change, it makes it easier for others to sell change to their constituencies."

But even as customers want the ability to make their own trades on-line, they also want advice, he said.

Figuring out how to offer both will be a balancing act for financial services companies.

"A more consultative approach on the retail side is the direction we're going in," Mr. Grundhofer said.

Rethinking the role of brokers in the securities business could yield dramatic change, but "there's no reason why you can't have an even more profitable business model," he added.

Mr. Grundhofer said U.S. Bancorp is well positioned technologically to exploit opportunities presented by the Internet.

"We're kind of excited because we have common systems in all 17 of our states," he said.

"It's hard to be an Internet provider if you don't have that."

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