NEW YORK (CNNMoney.com) -- Economist Nouriel Roubini said Wednesday that asset bubbles are beginning to form in markets around the world, and he called for more regulation of the global financial system.
"I fear that we're back to business as usual," Roubini told CNNMoney.com at the World Economic Forum in Davos, Switzerland. "We need to try to curb the excesses in the financial system."
Roubini, a professor of economics at New York University, said the global economy could be in for another shock as investors around the world take advantage of low interest rates to fund risky bets in certain markets.
He said asset bubbles are already beginning to form that could put the U.S. economy into a "double-dip" recession if regulators fail to impose even more strict regulations.
"There's a wall of liquidity chasing assets and some of those assets are oil, energy, food and gold," he said. While those prices have been supported by a gradual improvement in the global economy, he said that some of the increases have been "excessive."
"Oil has gone from $30 a barrel to $80 a barrel at a time when demand is down to 2005 levels, and there's a huge inventory of oil," he said. "Part of the increase in oil and commodity prices is a bubble."
The reforms recently proposed by President Barack Obama are "going in the right direction," Roubini said. But he argued that more needs to be done to prevent banks from growing too large.
"With too-big-to-fail banks, you need to really break them up, not just limit their size," he said, adding that banks' proprietary trading should be separated from their commercial activities.
"I would go back to the former Glass-Steagall," he said in reference to banking reforms instituted after the Great Depression, which were later repealed.
Roubini, who is known by many as "Dr. Doom" for his consistently pessimistic outlook, also warned that U.S. fiscal policy is "unsustainable" and that the nation's creditors could shun U.S. debt.
"Eventually the bond market vigilantes are going to wake up even in the United States and Japan, given that the current path of fiscal policy is obviously unsustainable in the U.S. and in most advanced economies," he said.
Still, he said that the U.S. economy may require more stimulus "at the margins" as unemployment remains high and many U.S. states struggle with massive budget deficits.
"In the short-term, we may need more stimulus, but that has to be accompanied by credible commitment to reduce deficits over the medium term," he said.
Roubini said the $787 billion stimulus package the government launched in 2009 was necessary and helped prevent the U.S. economy from sinking into a depression.
But he said policymakers need to come up with a plan to raise revenue and bring down the national debt so that "short-term stimulus is not going to lead to a loss of fiscal sustainability over time."
Roubini, who specializes in emerging economies, said that China's robust growth could lead to financial turmoil if the country doesn't do more to fight asset bubbles and become less dependent on exports.
"Eventually even China could get into trouble," he said.
Land O'Lakes CEO Beth Ford charts her career path, from her first job to becoming the first openly gay CEO at a Fortune 500 company in an interview with CNN's Boss Files. More
Honda and General Motors are creating a new generation of fully autonomous vehicles. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
Whether you hedge inflation or look for a return that outpaces inflation, here's how to prepare. More