THE proposed merger of Morgan Stanley and S. G. Warburg tells us a lot about the future of cross-border banking. The prophets of globalisation talk a familiar game: competition in the global market place leaves room for only a handful of big players who have the reach and capital reserves to compete. But is investment banking different? On the face of it, the answer has to be yes. The internationalisation of money which pulls the savings of Belgian dentists and Korean pension funds into the same pool of investment funds requires firms with global reach to run the business. Yet banking is not a static business. Already the edge of the investment banks over their more cumbersome but better capitalised commercial banks is shrinking.