Bank takeovers worsened the financial crisis by making firms that were already too big even bigger, said Nouriel Roubini, the economist and New York University professor who predicted the financial crisis.

"The institutions are insolvent," Roubini said in a Bloomberg Radio interview. "You have to take them over and you have to split them up into three or four national banks, rather than having a humongous monster that is 'too big to fail.' "

Banks worldwide have reported $1.29 trillion of credit losses tied to the housing market collapse since 2007.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.