Point of View: WHEN IN DOUBT, DIVERSIFY: Diversification creates stability in uncertain times.

In the quest for rapid earnings growth, many banks forgot the importance of diversification. Rushing into the moment's hottest businesses, they abandoned activities that at the time seemed lackluster. The go- go businesses of the 1990s reflected the stock market's boom: investment banking, stock brokerage, wealth management and equity investment. On the other side, banks were dumping what seemed to be slow- growth activities: mortgage banking, auto-financing and credit cards.

These initiatives were taken perhaps more to please investors with short-sighted goals than