NEW YORK -- Sandy Weill is having a change of heart.
Weill, the aggressive dealmaker who built Citigroup on the idea that in banking, bigger is better, said Wednesday that he believes big banks should be broken up.
Speaking on CNBC's "Squawk Box," Weill, 79, appeared to shock the show's anchors when he said that consumer banking units should be split from riskier investment banking units. That would mean dismembering Citigroup as well as other big U.S. banks, like JPMorgan Chase and Bank of America.
It's an idea that's traditionally more in line with the banking industry's harshest critics, not its founding fathers. It's an ironic twist coming from an empire-builder who nursed Citigroup into a behemoth.
Weill, who with his wife, Joan, donated $12 million last year to complete Sonoma State University's $120 million Green Music Center and has a home in Sonoma, said the radical change is necessary if U.S. banks want to rebuild trust and remain on top of the world's financial system. Weill also criticized banks for taking on too much debt and not providing enough disclosure about what's on their balance sheets.
"Our world hates bankers," he said.
Big banks have been villainized in the financial crisis and its aftermath. Resentment lingers over the government's using taxpayer money to give bailout loans to the biggest banks, including Citigroup.
But standalone investment banks, Weill said, wouldn't take deposits, so they wouldn't be bailed out. Banks that have both investment banking and consumer banking say it's necessary to keep them together because they balance each other, ensuring stability no matter the economy.
Weill's professed conversion set off a flurry of reactions. The banking industry's critics hailed it. "Sanford Weill is one of many banking industry experts who have observed that too big to fail is often too big to manage," Sen. Sherrod Brown, D-Ohio, said.
Others were unimpressed. Joshua Brown, a New York investment adviser and blogger, called Weill "the original architect of Too Big To Fail" banking and noting that Weill didn't apologize "for the Citigroup he built or its imitators."