Calls to break up the nation's major banks do not solve the risk problems at the heart of the 2008 financial crisis, Robert Rubin, former Clinton Treasury Secretary, told CNBC.
A Citi board member from 1999-2009, Rubin said, "If you followed Sandy's path, and you broke up the banks in some fashion or other ... the risk isn't going to go away. The systemic risk, the 'Too Big to Fail' risk, will move from one place to another place."
Last summer, Weill - long-considered the father of the "supermarket banking" model - had surprising reversed course in a "Squawk Box" interview.
"I think what we should probably do is go and split up investment banking from banking. Have banks be deposit takers. Have banks make commercial loans and real estate loans. And have banks do something that's not going to risk the taxpayer dollars."
(Read More: Wall Street Legend Sandy Weill: Break Up the Big Banks )
"If I take the risk away from [the banks] ... where is that risk going to go and how do I deal with that," Rubin asked. "I don't think anybody's come up with a good answer to that."
The idea of "Too Big to Fail" and the eventual bailout of the banks was born out of the response to the 2008 financial crisis, in which outgoing Treasury Secretary Tim Geithner played a major role. Geithner, the longest-serving member of Obama's economic team, announced last month that he's stepping down.
Handicapping Geithner's tenure, Rubin said the Obama administration brought the country back from "the brink of an abyss."
At the time, there was tremendous pressure from the left and the right to abandon the Troubled Asset Relief Program (TARP), Rubin recalled. But the president and Geithner saw it through to success, he argued, adding that the economic stimulus that followed was right and "the amount was about right."
Geithner plans to join Rubin at the Council on Foreign Relations as a distinguished fellow and write a book on dealing with the financial crisis.
(Read More: Geithner Plans Book on Battling Financial Crisis )
Jack Lew has been nominated to be the next Treasury Secretary. The White House chief of staff's confirmation hearing will convene next week .
"He was a very good choice," Rubin said of Lew's nomination, while dismissing concerns that Lew might not know enough about the financial markets.
Asked if Lew would be the right person for the Treasury job should there be another financial crisis, Rubin said, "I think the answer is yes."
-By CNBC's Matthew J. Belvedere; Follow him on Twitter @Matt_SquawkCNBC