Updated with additional comments from Sandy Weill and comments on the complexity of large bank holding companies from the Federal Reserve Bank of New York. NEW YORK ( TheStreet) -- Former Citigroup ( C) Chairman Sanford "Sandy" Weill said on Wednesday that it's time for the United States to "go and split up investment banking from banking." In an interview on CNBC, Weill -- who led the 1998 merger of Travelers Group and Citicorp to form Citigroup -- said that the financial crisis "was created by too much concentration in investments in the banking system, way too much leverage,
and very little transparency with lots of off-balance sheet things that didn't really count, and I think a lot of those things have to change." "What we should probably do," Weill said, "is go and split up investment banking from banking, have banks be deposit takers, have banks make commercial loans and real estate loans, have banks do something that's not going to risk the taxpayer dollars, that's not going to be too big to fail, and if they want to hedge what they're doing in their investments, let them do it in a way where it can be marked to market so they're never going to be hit." Weill then said "let's have a creative investment banking system like we've always had, where the financial industry can again attract the best and the brightest young people like they do in silicon valley, like they're doing in engineering, so that we can lead the innovation that's necessary and the entrepreneurship that's necessary. "We can't have a world where it's impossible to make a mistake... because if we do that, we're not going to have a world where anything happens right." When pressed for clarification on whether the largest banks really should be broken up, Weill said "I am suggesting that they be broken up so that the taxpayer will never be at risk, the depositors won't be at risk, the leverage of the banks will be something reasonable, and the investment banks can do trading... not subject to a Volcker rule." Continuing on the theme of separate investment banks, Weill said "they can be creative, they can make some mistakes, they'll have everything clearing with each other every single night so that they can be marked to market."