May 14, 1998

House, 214-213, approves banking bill that would overturn Depression-era curbs on financial services industries; bill allows for merging of banks, securities firms and insurance companies into huge financial conglomerates able to operate globally with far fewer regulatory restrictions; Speaker Newt Gingrich worked floor and kept Republican votes in line amid intensive lobbying by competitng groups; passage in Senate is not certain, although Senate approved similar bills in previous years, when House balked; Clinton Administration says it favors modernization of financial industry, but opposes bill provision to shift regulatory authority from Treasury to Federal Reserve; table (M)

Musicians, poets and activists who worked with Allen Ginsberg or were influenced by him will participate in three-hour celebration Cathedral of St. John the Divine in Manhattan to honor spirit of his poetry; photo; seven 16th-century miniature paintings made for nobleman's prayer book and valued at $500,000 will be returned to Germany, 50 years after they were stolen at end of World War II; University of Kassel sued for their return after art curator spotted them on wall of antique rug store owned by Thomas P Chatalbash in Brookline, Mass; Rafi Zabor's first novel, The Bear Comes Home, wins 1998 PEN/Faulkner Award for Fiction; singer Ray Charles and sitar master and composer Ravi Shankar are winners of Sweden's 1998 Polar Music Prize; Charles receives message of congratulation from Pres Clinton for outstanding musical career; photo (S)

Second investment group says it is exploring possible bid for Polygram NV, giant music company; group is comprised of Donaldson, Lufkin & Jenrette, Texas Pacific and A Jerrold Perenchio; Forstmann Little & Co and Thomas H Lee Co have also asked to study Polygram's financial data and meet with its management; Polygram is 75 percent owned by Royal Philips Electronics NV (S)

Justice Laure E Drager rules that Museum of Modern Art can return two borrowed painting by Egon Schiele to Leopold Foundation in Vienna despite continuing criminal investigation into their ownership by Dist Atty Henry Morgenthau and charges that they were confiscated from Jews by Nazis and made their way improperly into private collections after war; rules works are protected from seizure by 30-year-old state law; Morgenthau vows appeal; photo (M)

St John's University unexpectedly dismisses basketball coach Fran Fraschilla; St John's compiled 22-10 record under Fraschilla last season and earned its first berth in NCAA tournament since 1993; he had two years remaining on four-year contract worth $450,000 annually; photo (M)