Feb 3 (Reuters) - A top Federal Reserve official on Tuesday called for the breakup of big banks, saying that the financial industry needs smaller institutions.

St. Louis Fed Bank President James Bullard added that such a split-up is probably not realistic, given how integrated markets are globally.

Bullard, speaking at an economic forum in Delaware, said the time for restoring the Glass-Steagall Act, which had separated investment banks and commercial banks, had probably passed and was not the best route going forward.

But he did advocate for smaller financial institutions, saying the argument that large corporations need large banks was weak.

He repeated his view that the Fed's crisis prevention measures, known formally as macroprudential tools, are untested and it's unclear if they would work in the United States.

(Reporting by Michael Flaherty; Editing by Meredith Mazzilli)