Banks, securities firms and insurance companies have hired dozens of lobbyists, spent millions of dollars on legal fees and negotiated tirelessly for more than a decade for the right to invade one another's turfs.

Now, as Congress appears ready to make "one-stop" financial shopping a reality, many of these companies may find that the grass on the other side of the fence isn't so green after all.

Faced with sagging profits and rising bankruptcies, many banks, securities firms and insurance companies are having trouble surviving in the business they're in, let alone expanding into new product lines. And with losses mounting for all providers of financial services, the lure of each other's business has lost its appeal, according to business executives and government officials.

After all this waiting, deregulation of the financial markets may prove to be a nonevent. Few will want -- or have the financial wherewithal -- to plunge into the other's shaky business, many observers say.

"The irony is there," said one financial lobbyist. "At the very time that Congress is most likely to consider this, the actual number of institutions that could actually benefit from it is very small."

Bank profits are at record lows and failures are at record highs -- 169 banks went under in 1990 and scores more are expected to fail this year.

The major brokerage firms aren't in much better shape. For the first time in nearly two decades, the securities industry is expected to post a loss for 1990, and a turnaround isn't expected anytime soon. Thousands of workers have been laid off by Wall Street firms in the last few years, and thousands of additional cuts are expected. A major securities firm, Drexel Burnham Lambert Inc., failed last year. The firms that remain, faced with shrinking revenue from bread-and-butter businesses such as retail brokerage, mergers and acquisitions, are scrambling to cut costs.

Regulators agree that the country has too many banks and securities firms and that a shakeout, either through mergers or failures, will continue in both industries. How severe the contraction will be will depend on the length and depth of the recession.

Securities and Exchange Commission Chairman Richard C. Breeden warned Congress this week that allowing banks to sell securities or securities firms to own banks will be no "panacea" for the problems racking both industries.

Breeden, testifying Tuesday before the securities subcommittee of the Senate Banking Committee, cautioned that anyone who "thinks there's a fountain of profits" in the securities industry or who thinks "we'll solve all the problems by letting banks into securities ... better think again."

In the next few weeks, the Bush administration expects to unveil a plan to let banks and securities firms into each other's businesses, lifting the barriers that were erected in the wake of the 1929 market crash to separate banking and securities. The plan also is expected to include provisions to lift even older prohibitions that bar non-banking businesses, such as manufacturing companies like General Motors Corp. or retailers like Sears, Roebuck and Co., from owning banks.

Few suggest Congress should back off from considering plans to deregulate financial institutions, only that the benefit such changes will bring will come, if at all, in the long-term, not the immediate future.

"There's less and less profit in the securities industry, and that makes it less attractive to banks," said Kenneth Guenther, head of the Washington-based Independent Bankers Association, which represents smaller, community banks. Nor would Wall Street firms be likely to rush out to snap up banks anytime soon.

Many bankers and securities industry officials concede that the industries' woes leave few companies strong enough to take advantage of deregulation. Most are loath to say such things publicly, however, for fear of killing prospects for the long-sought legislative changes, even if it takes years before a few companies can make full use of them.

"Financial modernization is positive over the longer term. The longer you delay, the longer you delay the benefit," said Robert Dugger, chief economist at the Washington-based American Bankers Association, the industry's largest trade group.

Although many wonder if deregulation would be a nonevent, others wonder if it would be an out-and-out mistake during an economic downturn.

Consider, they say, the mistakes that contributed to the savings and loan fiasco: A decade of deregulation didn't help savings and loans regain profitability, as the Reagan administration hoped. Instead, in part because of poor implementation of the new policy, they say, deregulation served only to augment S&L losses by permitting investments in riskier, costlier ventures.