"There is an insufficient margin in the banking industry to sustain the number of banks we have," Silva told "Squawk Box Europe." "We need to see at least one third of the banks around the world disappear."
Some of that could happen with failures, but many of those banks could be bought by stronger competitors, he said.
The Federal Reserve also made the right decision in refusing to assist Lehman Brothers after its help with Bear Stearns didn't improve the overall financial situation, Silva added.
"Why would you bump into the same wall a second time?" he said. "You know it's going to hurt. You shouldn't do it. So, I think they did the right thing in not actually helping."