Get Ready for One-Stop Financial Shopping

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The legal department at Citigroup will be so relieved. The House of Representatives on Thursday night finally passed a bill that sweeps away the outdated taboos of the Depression-era Glass-Steagall Act. After a year of lobbying to protect its very existence –- the epochal $70 billion merger between Citibank and Travelers Group last spring is technically against the law –- the walls between banking, securities and insurance companies appear at last to be tumbling down.

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That is, if the Senate, the House and President Clinton can get their collective act together. Democrats are squawking that the House version doesn’t do enough to help poor neighborhoods and minorities get the service they need from reluctant insurers; Clinton says the Senate version takes too much regulatory turf away from the Treasury Department. Now the negotiators take over –- and Wall Street is salivating at the prospect of a deal. When Citigroup’s model of one-stop financial shopping becomes officially available to the rest of the corporate herd, get ready for a merger stampede; Merrill Lynch, Lehman and DLJ are all potential acquisitions (or acquisitors). And in the meantime, financial stocks may be a pretty good buy.