David Knutson, an analyst with Legal & General Investment Management, said it was hard to believe Weill, "the shatterer of Glass-Steagall," has now changed his mind. "He enjoyed the benefits of the demise of Glass-Steagall and only now has he become remorseful? Where was he five years ago?" said Knutson, whose firm owns bonds sold by Citigroup and JPMorgan Chase & Co., now the biggest U.S. bank by both deposits and assets.

Directors of Citigroup paid Weill about $1 billion, including stock, during his 17 years as CEO, as he assembled a behemoth with operations across the world that offered investment banking, trading, commercial banking, insurance and consumer finance. He left the board in 2006.

Taxpayers rescued Citigroup in 2008 after losses tied to subprime mortgages threatened the financial system. Bank of America Corp. also accepted a $45 billion bailout while JPMorgan and Wells Fargo & Co. each took $25 billion. Goldman Sachs Group Inc. and Morgan Stanley were given $10 billion apiece.

Taking Deposits

"We can have size and scale but it doesn't have to be connected to a deposit-taking institution," Weill said in the interview. "Have banks be deposit-takers, have banks make commercial loans and real estate loans."

Banks would be even more valuable if they heeded his advice, Weill said. Citigroup's shares, which traded as high as $564.10 at the end of 2006 adjusted for a reverse stock split, plummeted to $10.20 during March of 2009, six months after Lehman Brothers Holdings Inc. filed for bankruptcy protection. They closed at $25.79 yesterday.

Jon Diat, a spokesman for the bank, declined to comment on the remarks by Weill, who held the positions of chairman and chief executive officer of Citigroup after the Travelers merger. He retains the title of chairman emeritus.

Parsons, Reed

Richard Parsons, who earlier this year ended a 16-year tenure on Citigroup's board, said in April that the repeal of Glass-Steagall made the business more complicated and ultimately helped cause the financial crisis. Former Citicorp CEO John Reed apologized in 2009 for his role in building Citigroup and said banks that big should be divided into separate parts.

The four most complex U.S. financial holding companies -- JPMorgan, Goldman Sachs, Morgan Stanley and Bank of America -- each contain more than 2,000 subsidiaries, with two of those controlling more than 3,000 subsidiaries, according to a research paper published this month by the Federal Reserve Bank of New York. Citigroup has 1,645. Just one firm exceeded 500 subsidiaries in 1991, the report shows.