While Federal Reserve Board Chairman Alan Greenspan was urging Congress to repeal the Depression-era law that separates banking and securities activities, two senators went a step further yesterday and introduced legislation calling for total deregulation of financial services.

But critics said the proposal by Sens. Alfonse D'Amato (R-N.Y.) and Alan Cranston (D-Calif.) was so radical that it could prevent Congress from agreeing on any legislation to loosen the reins on banking. The D'Amato-Cranston bill would allow banks to be affiliated with securities, real estate, insurance and manufacturing companies as long as deposits insured with federal funds were not used to finance those other companies.

A competing bill, introduced last month by Sens. William Proxmire (D-Wis.) and Jake Garn (R-Utah), would repeal only the 54-year-old Glass-Steagall bill, which bars most commercial banks from the riskiest activities involved in issuing, buying and selling stocks and bonds.

That bill would continue to keep banks out of most real estate and insurance activities and to prevent manufacturers and other nonfinancial companies from owning banks.

Greenspan told a hearing of the Senate Banking Committee yesterday that total deregulation should be considered only after Congress can weigh the result of allowing banks to take the incremental step into securities.

Greenspan said that while, in theory, he may favor allowing far broader deregulation for banks, the Fed has not yet endorsed such sweeping reform. He also said that a bill that limits deregulation to the repeal of Glass-Steagall stands a far greater chance of passing Congress than a bill that contains wide reforms of all financial services.

Several lobbyists and congressional aides said that a push for broad deregulation could -- intentionally or unintentionally -- delay congressional agreement on banking change.

"{The more} you up the ante on what's at stake, the more you make action unlikely," agreed Karen Shaw, a Washington bank consultant.

Failure to act on a comprehensive bill in turn increases the likelihood that Congress will extend a provision passed last summer that temporarily bars banks from offering new financial products in securities, real estate or insurance, congressional aides said. Extending the moratorium, which is scheduled to expire March 1, would delight a large sector of the securities industry, which wants to keep banks out of the U.S. securities market.

U.S. banks already can underwrite securities abroad.

D'Amato, who is regarded by many of his colleagues on the Senate Banking Committee as a proponent of the securities industry, denied he had any hidden motive in introducing a bill in competition with the Proxmire-Garn legislation. He said his goal is to help consumers by increasing competition among all financial service companies, which he said the Proxmire-Garn bill does not do.

"This is not a delaying tactic," he said.

Greenspan's testimony yesterday came during a series of hearings on financial deregulation that will be held through next week in the Senate and House.