Representatives from banking, the securities industry and the Federal Reserve yesterday told the Senate Banking Committee that major changes are needed in the nation's banking and securities laws. But they disagreed, as similar witnesses have for years, over what the changes should be.

Retired Citicorp chairman Walter B. Wriston held up American Express Co. as a model of the financial services corporation of the future. American Express subsidiaries, he said, include the 49th-largest bank in the country, a major insurance company, a large securities dealer, its credit card and travelers check operations and other financial services.

Several federal and state agencies regulate American Express business activities. For example, the Securities and Exchange Commission oversees the company's compliance with requirements related to the issuance of stock. But there is no regulation of what American Express, as a holding company, may own. "It works," Wriston said repeatedly.

American Express is not regulated by the Federal Reserve as a bank holding company because the bank it owns, the Boston Safe Deposit & Trust Co., with assets of $7.8 billion, makes no commercial loans. Under federal law, such institutions are not considered full-service banks.

In contrast, E. Gerald Corrigan, president of the New York Federal Reserve Bank, told the Banking Committee it would be risky to allow commercial corporations to own financial institutions that accept federally insured deposits and can call upon the Federal Reserve as a "lender of last resort."

Corrigan, explaining a comprehensive banking regulatory reform proposal he made in January, said the Fed has an obligation "to ensure the safety and soundness" of financial institutions to which it may extend tens of billions of dollars worth of credit. Therefore, the central bank needs to make sure that banks and their owners are creditworthy. "There is government money at stake," he said.

Under Corrigan's proposal, holding companies owning banks would be allowed -- as they generally are not under current federal law -- to provide through subsidiaries a wide range of financial services, such as underwriting securities issues and operating mutual funds. Other companies could offer a full range of financial services apart from accepting insured deposits. A third group, including commercial companies, could also offer financial services but could not own banks.

John Weinberg, senior partner of Goldman, Sachs & Co., a New York investment banking firm, declared, "If Congress elects to break down the barriers between commercial and investment banking and let our friends, the commercial banks, do everything -- and I know they want to do everything we do -- what will that mean for concentration? What will that mean for competition? And what will that mean for risk? This concerns me."

Weinberg added, "Since the founding of our country, the American people have questioned the wisdom of allowing the financial systems to be dominated by a few large financial giants. With the barriers gone, I don't have any doubt that there will be a lot fewer players in the long run. It has been a good thing that financial power has been split between two industries."

Several members of the committee praised the three witnesses for the quality of their testimony but said, in various ways, that they had heard most of the arguments before.

Sen. Jake Garn of Utah, the ranking Republican, complained that Congress had been struggling to deal with banking deregulation for a dozen years, but that different groups providing financial services have refused to agree to any sort of a compromise. The groups are still unwilling to give up any part of current law that shields them from competition from another sector. "Positions have hardened," he said.

Committee Chairman William Proxmire (D-Wis.) went so far as to ask the witnesses' views on the campaign financing reform legislation now before the Senate. It was directly relevant to yesterday's hearing, he said, because the various parties in the long-running dispute are major sources of campaign contributions to senators "whose careers are at stake.

"We have taken thousands of pages of testimony over the years, and there has been no action," Proxmire declared. The campaign contributions have "an effect on Congress and its ability to act," he said.

Corrigan and Wriston ducked his question. Weinberg endorsed an overhaul of campaign financing laws.

All three witnesses agreed that the current system of insuring deposits up to $100,000 should continue. "It has been baked into the culture of this country," Wriston said.